The Bitcoin market rallied a bit on Wednesday heading towards the FOMC. The $40,000 level is an area where I would expect to see some downward pressure, and it is probably worth mentioning that the so-called “death cross” is getting ready to kick off, when the 50 day EMA drops below the 200 day EMA. It is normally a late signal, but longer-term investors sometimes will short at that point.
At this point in time, pay special attention to the hammer from Monday, because if we break down below it, that would be an obviously very negative turn of events. At that point I would anticipate that the Bitcoin market will test the $30,000 level, which is an area that has been important in the past and is a large, round, psychologically significant figure. With this being said, I believe that the market is more than likely going to continue to see a lot of headwinds, even though we may get a short-term relief rally.
Bitcoin is the driver of all of the other crypto markets, so if we do take off here there will be a lot of opportunities out there, and I think I would be more than willing to get involved in not only the Bitcoin market, but probably Ethereum and Solana as well. Ultimately though, it is worth noting that we are seeing a little bit of profit-taking. I do not know if there is a lot of confidence in this market right now, so it is very likely that the Bitcoin market will get hammered.
Anything below the $30,000 level would more than likely put us back into “crypto winter”, when markets do very little, and the smart money starts to come in and accumulate. I know I will be doing the same if that does in fact happen, and will ride the market higher over the longer term. Bitcoin is very difficult to trade from a short-term perspective, as you will find out over the next couple of days.
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