Bitcoin initially tried to rally during the trading session on Thursday but gave back gains yet again. The Bitcoin market looks miserable at the moment, and I don’t really see an argument for buying at this point. Yes, the $20,000 level is a large, round, psychologically important figure to pay attention to, but at this point, it looks as if we are grinding away and trying to break through.
If we break down below the $18,000 level, it should open up an even deeper correction down to the $15,000 level. After that, I anticipate that the $12,000 level will be the target. In fact, my longer-term target for Bitcoin is my target. In that area, I will be paying close attention to the market to see whether or not we can stabilize enough to start buying again. I do believe that eventually, Bitcoin will find a reason to turn around, but right now we still have plenty of monetary tightening that is coming down the road, and that will continue to be a major influence on risk appetite. As long as risk appetite is miserable, Bitcoin is going nowhere.
The market has been selling off every time it has tried to rally and at this point, the US dollar will continue to strengthen against most things, especially an asset that is still trying to define what it is. That being said, the market could take off to the upside, but if we do I think the absolute “ceiling in the market” right now is the 50 Day EMA. Granted, we could get a bit of a relief rally, which makes quite a bit of sense. At that point, I will more likely than not try to find a crypto exchange to start shorting Bitcoin again. Ultimately, it does bottom given enough time, and then it becomes a great investment. That being said, it’s more likely than not that we are going to see some type of longer-term base-building project in order to turn things around. Quite frankly, if you are bullish on Bitcoin, then you’re going to have plenty of time to build up a position. In fact, the market is likely to see a “crypto winter” in order to change things around. Crypto does tend to move in cycles, and I think we are in that downward cycle yet again.
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