The Bitcoin market initially tried to rally on Friday but gave back gains as the top of the bullish flag we are in continues to offer resistance. Ultimately, I do think that this market will break out to the upside and a move above the 63,000 level will more than likely be the main driver. At that point, I will get long of Bitcoin yet again, perhaps playing out the entire bullish flag pattern.
At this point, the bullish flag measures for a move to the $85,000 region, which could happen sooner rather than later. When you look at the way that the flag was constructed, the move higher was almost parabolic, and we could see that happen again. Bitcoin is going to get a certain amount of inflow due to the idea of the ETF situation making it easier to deal with, and I think this will continue to be a very strong bullish market. This does not mean that we cannot pull back, but I look at pullbacks at this point as a buying opportunity.
The 50-day EMA sits up above the $54,000 level, and now looks to be offering a certain amount of support. That means that the $55,000 level should be supportive itself, as the $50,000 level should be as it is a large, round, psychologically significant number, and the place where we had previously seen a lot of resistance. In other words, if we fall in this market, there will be plenty of opportunities to pick up Bitcoin “on the cheap” as we drift lower. I think that there are enough people out there waiting to get a little bit better price that the interest will obviously pick up as we drop.
Keep in mind that there are a lot of moves being done by central banks to tighten monetary policy, but at the same time a couple of them have balked. England and Australia both have chosen not to tighten monetary policy, at least for the time being. The question now is whether or not inflation will start to drive Bitcoin. Regardless, one thing that I think you can see playing out in this chart is that there are plenty of buyers every time it dips, and the momentum is most certainly to the upside.
