Bitcoin markets have been rather choppy over the last several sessions, but it looks as if the $27,000 level is going to continue to offer a bit of support. It’s worth noting that the market has been noisy based upon a lot of concerns economically, as the Federal Reserve continues to find reasons to stay tight. After all, recto has never really had to deal with tightening monetary policy, and that has proven that crypto has a certain amount of correlation to risk assets in general.
Looking at this chart, the 50-Day EMA sets just above the $27,000 level, and as bitcoin tends to be a very technical market, it should probably not be a huge surprise that it looks like we are trying to bounce from there. Furthermore, the CPI numbers in the United States came out cooler than anticipated during the trading session, so it has some traders looking for the Federal Reserve to start easing monetary policy sooner than originally thought. That might be a bit of a stretch at this point, so getting carried away at this point is probably a bit much.
On the upside, the $30,000 level continues to be a major resistance barrier and an area of a lot of psychological importance. Breaking that level would of course be very bullish, but it’s not until the market breaks above the $31,150 level that the uptrend could continue. On the other hand, if the market breaks down below the $26,500 level, it’s very likely that Bitcoin will continue to fall toward the $25,000 level. Obviously, the $25,000 level is a large, round, psychologically significant figure that will attract a lot of headlines.
All things being equal, this is more likely than not going to continue to be consolidation going forward, but some traders may start to look at this as a potential head and shoulders pattern, although a particularly ugly one. More likely than anything else is going to continue grinding back and forth until we get some type of larger catalyst to open up the markets. It is worth noting that on very long-term charts, the area above has been both massive support and massive resistance on the monthly chart, so this may be part of what we are seeing here, the market trying to figure out whether or not it can build up the necessary momentum to change the overall attitude of bitcoin.
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