- During the session on Tuesday, we saw bitcoin dropped, testing the $81,250 level by the time New York was closing out.
- That being said, there isn’t much in the way of support between here and the $76,000 level, so it’ll be interesting to see whether or not we can get there.
- The candlestick certainly suggests that we could, so I think at this point in time you have to look at this through the prism of a market that is being held hostage by a lack of risk appetite.
- The fact that we have a Federal Reserve interest rate decision on Wednesday. Remember, despite the fact that most people who are diehard Bitcoin enthusiasts don’t know this, Bitcoin is all about monetary policy.
Technical Analysis
The technical analysis for Bitcoin is very ugly at the moment, and quite frankly I don’t see it getting any better in the short term. However, there will come a time where the Federal Reserve has to cut rates, and if and when they do, that will be like rocket fuel for Bitcoin. The $75,000 region is an area that has previously been important as far as resistance is concerned, so I anticipate that we should have a significant amount of support in that general vicinity.
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It’s probably worth noting that the 200 Day EMA is sitting right around the $85,000 level, and it should offer resistance every time we try to get to it. If we can break above there, then the $90,000 level is the next target, which is also backed up by the 50 Day EMA. Furthermore, you should probably pay attention to the 50 Day EMA, because it looks like it’s going to try to drop enough to cross the 200 Day EMA, kicking off the so-called “death cross.” This of course is a very late signal, but some longer term traders pay close attention to it so it could cause a little bit of negativity as well.
As for myself, I have recently been buying little bits and pieces along the way, essentially “dollar cost averaging” into Bitcoin. As far as trading it is concerned, think it’s going to be very difficult to be positive in the short term.
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