Bitcoin Forecast: Continues To Press 40K

The bitcoin market rallied a bit during the course of the trading session on Thursday to reach towards the $40,000 level before pulling back a bit.

Ultimately, this is a market that is trying to build up some type of basing pattern, as we have seen such a massive selloff. We continue to hover right around the 200 day EMA, which of course is a major technical indicator that a lot of people will pay attention to. Nonetheless, we have not been able to hang onto any significant moves, so while the market was up over 2 ½% for the session, that pales in comparison to the massive selling that we had recently seen.

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I do believe that the $30,000 level underneath is going to continue to be major support longer-term, and because of this, it is crucial that the market hangs on to that level. If it does not, we could very quickly find bitcoin trading down at the $20,000 level. The $20,000 level is an area that has been important in the past as resistance, so it would not surprise me at all to see this market offer a significant amount of support on the way back down. If for some reason we were to break down below the $20,000 level, then it is likely that we would see a complete “crypto winter” coming down the road.

The US dollar got a bit of a boost during the day, so the fact that bitcoin rallied in the face of that is a somewhat good sign, and with that being the case I look at it as a potential opportunity for the market to prove itself. Again though, it is not until we get a daily close above that $40,000 level that I would be completely convinced that we are about to turn things around. At that point, the 50 day EMA is reaching towards the $47,000 level, and that could offer a little bit of trouble. After that, we could be looking at the $50,000 level which of course has structural and psychological importance, with that an area being previous support and of course a good headline number. I think that we simply wait until we get some type of significant candlestick to get involved in one direction or the other. Currently, we do not have one.

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