Bitcoin rallied initially during the trading session on Monday but did give back some of the gains, showing signs of hesitation. So, because of this, I think you have to look at it through the prism of a market that is trying to sort out whether or not it is topping out. If that’s going to be the case, then it’s possible that we could pull back into this previous consolidation range. This would make a lot of sense, as there is a lot of uncertainty in the overall markets in general.
If we were to do so, the 20 day EMA, the 50 day EMA, and the $40,000 level all comes into the picture. I think overall what we’re doing is consolidating right now in order to perhaps try to build up the necessary momentum to finally break out. If we do get a little bit of a move to the upside, then it allows for a move to the $52,000 level. Keep in mind that the Bitcoin ETF had the world a buzz for Bitcoin and it did rally quite drastically before that so at this point in time, I think you’ve got a situation where you are going to continue to buy the dips, but the dips are probably necessary in order to get overly bullish.
If we do break to the upside, the $52,000 level is an area that I think being broken above, then Bitcoin would return to more of a buy and hold market like we had seen previously. Keep in mind that the market had gained something like 90% right before the ETF announcement, so now we have to find some type of catalyst for the market to continue screaming higher. The last couple of sessions have been very strong, but it does look like we are a little overextended, at least in the short term. This should end up being a buying opportunity in the end, but be cautious about putting a ton of money into the market right away, rather I would have patience and add slowly – unless we break out to the upside.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.