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Bitcoin Price Forecast – Bitcoin Takes Off

By:
Christopher Lewis

Bitcoin has exploded to the upside to kick off the trading week, smashing through the $40,000 barrier.

Bitcoins, FX Empire

In this article:

Bitcoin Forecast Video for 05.12.23

Bitcoin Technical Analysis

Bitcoin has been explosive during the Monday trading session, as we have broken through the $40,000 level. This has a lot to do with the idea that traders believe that the Federal Reserve is going to start cutting rates as early as March, and of course the idea that there is going to be more demand for Bitcoin through the ETF markets as soon the SEC approves them. Whether or not that actually ends up being the case remains to be seen, and at this point we are still trying to figure out exactly what the purpose of Bitcoin is, other than speculation.

That being said, as a technical analyst, the one thing that I can figure out right away is that momentum is almost certainly going to continue after this type of move. I would anticipate that the $40,000 level would be an area of significant support, as it had previously been resistance. A certain amount of “market memory” would come into the picture at that point, and therefore I think you’ve got a situation where a lot of traders will be interested in getting back involved in the market if we pull back to that level in order to offer value.

I certainly have no interest in shorting Bitcoin, and at this point I think the 20-Day EMA, plotted on the chart in blue, should offer short-term support and a bit of a “floor in the market” if we do pull back for any reason whatsoever. More likely than not, we won’t, at least not significantly, so therefore I think it’s probably only a matter of time before we reach the $45,000 level.

Pay attention to the interest rates in America, because if they start to rise again, that probably works against Bitcoin, but at this point it certainly looks like the bond market is trying to bully the Federal Reserve into cutting rates quickly, and therefore if that ends up being the case, a lot of that “cheap and easy money” will go into the cryptocurrency markets to start gambling on extreme volatility again. That being said, this next bull market in cryptocurrency may not be as strong and volatile as the ones the past, because more institutions are involved.

About the Author

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.

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