Bitcoin Price Outlook – Bitcoin Continues to Work Off Froth

Bitcoin Technical Analysis

Bitcoin initially did pull back a little bit during the trading session on Wednesday, just as we had seen on Monday and Tuesday. Also, just like we had seen on Monday and Tuesday, the buyers came back in to pick up the market.

That being said, overall, I think we are more or less going sideways here, and it does make a certain amount of sense considering that we had been so bullish previously and at this point in time probably are somewhat overbought. It’s worth noting that the $106,000 level has offered significant resistance a couple of times in the past and in fact, at the beginning of the year, we actually ended up forming a bit of a double top.

We find ourselves in that same general vicinity now and it looks as if breaking above the $106,000 level might be a bit difficult. Breaking above $106,000 could open up an attempt at $110,000, but I look at that more or less as a thick zone of selling pressure and supply. If we can get above the $110,000 level, then I think we really start moving to the upside again.

In the short term, due to the overextension of the rally, we will more likely than not do one of two things. We’ll either go sideways and use time to work off some of the froth, or we will pull back towards that $100,000 level again, possibly even as low as $96,000 in order to offer enough support to entice new buyers. All things being equal, this is either a buy on the dip or buy the breakout type of market from what I see and have no interest whatsoever trying to be on the short side of this trend.

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