Bitcoin Finds Support at Familiar Level

Bitcoin Finds Support at Familiar Level
Bitcoin Finds Support at Familiar Level

You clearly cannot go “all in” at this point, although I do think that longer term we will eventually see an uptrend reassert itself.

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The Bitcoin market initially fell during the trading session on Wednesday as the $30,000 level continues to be crucial support. That being said, we managed only to recover back to the 200-day EMA, an area that could very well end up being very negative in general. After all, the 200-day EMA is a widely followed trend-defining indicator, so it does make sense that people would look at it as an area to defend.

Beyond that, we are testing the bottom of the ascending triangle that we just broke out of, and that is a relatively important area to pay close attention to as well. If we can break above the 200-day EMA, it is possible that we will completely ignore the previous triangle and go looking towards the $40,000 level. The $40,000 level has been rather resistive as of late, so that is something to pay serious attention to. Breaking above that would be a major victory by the Bitcoin enthusiasts out there. It is a bit early to claim victory at this point.

The main news during the trading session was that Interactive Brokers is going to be offering crypto trading later this year, so it is thought that large amounts of money may flow back into the marketplace. At the end of the day, that is just the narrative, but it is at least an excuse for the rally. Volatility for Bitcoin is still off the charts, so you clearly cannot go “all in” at this point, although I do think that longer term we will eventually see an uptrend reassert itself.

From a technical analysis standpoint, there is a strong argument to be made for the possibility of a move down to the $20,000 handle. That is an area that I think will show quite a bit of interest, as it was previous resistance and the highs of the last major bullish run. I think a certain amount of “market memory” comes into play, and I think what we are seeing is an opportunity to take advantage of value if we get down to that area. If we break down below the $20,000 level, look out below.

BTC/USD

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