Bitcoin has been extraordinarily negative during February, as traders cannot find a reason to push the market higher. In fact, narrative after narrative has been wiped out.
BTCUSD
Bitcoin has been extraordinarily negative during the month of February and at one point in time seemed as if the buyers were coming in to try to at least save Bitcoin as we had bounced so hard from the $60,000 level.
However, since then we have seen nothing but weakness and now the markets will be focusing on the $60,000 level. The $60,000 level as we are closing out in the month of February looks to be very important.
If we were to break down below there it is possible that we could see the Bitcoin market fall rather significantly, perhaps down to the $50,000 level. One of the biggest problems that we will have in the month of March when it comes to Bitcoin is there are still questions about what it actually does.
Throughout my career I have watched Bitcoin jump to astronomical heights based on one narrative after another but unfortunately almost every narrative that I have ever seen explains why Bitcoin was valuable has been wiped out.
The Institutional Factor
The latest one was of course that it is like digital gold and while that sounded great the reality is gold is near all-time highs while Bitcoin cannot catch a bid. The other thing to think about is that the institutions are now part of the Bitcoin ecosystem and while people had initially celebrated that we are now looking at a market that is below where it started once Wall Street got involved.
Institutions do not typically make a habit of chasing assets that drop by 20% a month, which we have seen a couple of times here recently. In other words, the best case for Bitcoin is going to be sideways action where traders see the market try to find its footing.
$60,000 will be crucial followed by $50,000. If Bitcoin drops below $50,000, we could see complete wipeout. We are hanging on by a thread as I write this and now it is probably worth noting that we just cannot get a bid and the negativity could very well overwhelm things.
As things stand right now the market looks at this as a market that it is not until we break above the $72,000 level that we even begin to show a slight promise.