The Bitcoin market has risen a bit during the early hours on Thursday as interest rates in America rolled over a bit.
Let’s be honest, the interest rates in America have been very strong as of late and that is something that works against the value of Bitcoin pretty quickly as it’s a risk barometer.
Remember, Bitcoin is pretty far out on the risk appetite spectrum and as a result, traders tend to look to it when times are good and run from it when times are bad. The higher yields offered in the bond market make it a much more attractive scenario than a non-yielding asset. A lot of money managers will just park money there.
That being said, Bitcoin has recently been seeing a bit of an inflow when it comes to money into ETFs. So that suggests that we might be getting a bit of institutional demand. And therefore, we may be in the midst of turning this entire thing around. We formed a massive rounding bottom and broke above it a couple of weeks ago.
Technical Outlook and Risk Factors
Now, we need to see some type of volume spike or some type of massive drop in rates, that could drive Bitcoin towards the 200-day EMA. Above there we could be looking at the 84,000 level. I am a buyer of dips, but I don’t do it with any leverage.
I recognize that this is a market that’s far too volatile and of course we’re only a couple of headlines away from seeing the whole thing fall apart, probably something coming out of the Middle East. The 50-day EMA sits at 73,671.42 and the 72,000 level also should be supported. So, I’m constructive, I just do not expect explosive moves to the upside.
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