Quite frankly, the biggest problem that I think Bitcoin has been that there’s no real use case for it.
- The BTC/USD has fallen rather significantly during the trading session on Friday as the $18,000 level has offered a significant barrier.
- This is an area that was previous support, so now it should have plenty of market memory here, meaning that there should be plenty of sellers.
- Breaking above the $18,000 level would open the possibility of a move to the 50-Day EMA, but I don’t think that is going to be a situation where you need to get overly excited.
Any side of exhaustion after a rally will be jumped on, and quite frankly the Friday candlestick might just be that signal. If we break down below the lows of the last couple of days, then I think you have a real shot at breaking down to the $15,000 level, possibly even down to the $12,000 level, where we had started this whole bullish run. At this point, I think this is a market that will more likely than not continue to look at that as a potential target, and then at that point it’s possible that we could see some type of base-building exercise. That would probably take quite a bit of time to get through, but I do think that accumulation could start in that area.
Bitcoin Likely to Keep Losing Ground
At this point, I think this is a “fade the rally” type of market as it has been for a while because quite frankly Bitcoin has a whole host of things working against it. The first thing is the tight monetary policy coming out of the Federal Reserve, which gets people keeping out of the risk-taking business. After that, you have the FTX blowup, and of course, a lot of people are stepping away from crypto altogether. Quite frankly, the biggest problem that I think Bitcoin has been that there’s no real use case for it. Yes, I know all the theoretical cases that people talk about with Bitcoin, but it’s just not being used.
Furthermore, what I’m worried about is that during the next cycle we have Central Bank Digital Currencies coming out, which of course will have a major advantage over Bitcoin as far as public trust is concerned. Yes, I understand the argument for Bitcoin, but remember most people are more like your Aunt Millie, they want simplicity. I think Bitcoin continues to go lower at this point.