Potential signal: on a daily close above $64,000, I am more than willing to put a position on and aim for the $70,000 level above. I would have a stop loss at $62,000 underneath.
- Bitcoin initially plunged during the trading session on Tuesday, breaking below the 50-day EMA, but has since seen buyers come back into the market in order to pick it up.
- It'll be interesting to see what happens here because I believe that the $60,000 level is significant support from a psychological standpoint, if nothing else, and the fact that we have bounced from that region twice already.
- The “market memory” in this area will more likely than not attract a lot of attention, as technical traders will look for value in that area.
The 50-Day EMA
The 50 day EMA is an area that certain technical traders will pay close attention to so would not be a huge surprise at this point in time to see a little bit of a bounce from here. If we can continue to go higher, perhaps breaking above the $64,000 level, then I anticipate that Bitcoin could travel all the way up to the $70,000 level as we continue to try to keep the uptrend intact. The alternate scenario would be a significant breakdown below the $60,000 level perhaps opening up a pullback to the $52,000 level, which is an area that previously had been resistant. A little bit of market memory in that area certainly would make quite a bit of sense.
(Click on image to enlarge)
Regardless, it's not a huge surprise to see this market bounce around the way it has because it shot straight up in the air for an entire month and a half or so gaining 92% in six weeks just isn't typical. The market has to digest a lot of inflow. The ETF in Bitcoin on Wall Street has changed the dynamic of this market so it'll be interesting to see how that plays out but right now I suspect there's more of a risk to the upside than the down. That being said, you need to be cautious because of course Bitcoin has ruined a lot of traders in the past for those who have gotten far too aggressive.
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