Bitcoin has initially tried to rally during the trading session on Thursday but continues to see a lot of overhead resistance as we are perhaps starting to run out all momentum. After all, Bitcoin is very far out on the risk spectrum, meaning that it needs a lot of people to feel very confident about taking on the type of volatility that the market can bring. That being said, recently we’ve seen a real push away from risk appetite, and therefore you are starting to see Bitcoin struggle.
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Another thing that is coming into the picture is the fact that the $25,000 level has a lot of psychology attached to it, so it does make sense that we would see the market pullback from there yet again. At this juncture, the market is likely to continue to be more back-and-forth at this level, and then perhaps drop. That being said, you also have to keep it in the back of your mind that breaking above the $25,000 level would be a huge signal that we are ready to go higher. In that scenario, Bitcoin could go to the $27,500 level, perhaps even the $30,000 level after that.
One thing that does work in the favor of Bitcoin is the fact that we have seen several major disruptions in the crypto space, not the least of which have been exchanges going under and fraud being exposed. The fact that Bitcoin stopped falling and then turned around when that happened suggests that there is some hope for Bitcoin in the future, and this is almost a situation where the news had gotten so bad that quite frankly there was no more negativity to put into the market. If that’s going to be the case, that gives Bitcoin a bit of a hard floor underneath. Nonetheless, in the short term it certainly looks like a pullback is in the cards.
The 50-Day EMA sits at the $21,250 level, which was also the most recent swing low. That area could be important, and I think that a lot of buyers would jump back into Bitcoin if we test that area. However, if we were to give up that area, it would look very weak at that point, and then I believe we could probably drop all the way back down to the $20,000 level rather quickly, maybe even down to the $17,500 level, where the momentum reentered the market.
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