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The Bitcoin (BITCOMP) market has been so broken down that it would not surprise me at all to see a complete reversal over the longer term, because so many people will have been waiting for this opportunity. 

Bitcoin pulled back just a bit on Wednesday but found plenty of buyers underneath the turn things around. The $47,500 level looks to be an area of interest, especially now that we have had such a bullish run higher. The market breaking above the highs of the previous session could open up the possibility of a move towards the $50,000 level.

Any pullback at this point will more than likely find support at the previous resistance barrier, to be found at the $45,000 level. The 200-day EMA sits just below there, so I think there will be plenty of support in that general vicinity. Buyers will almost certainly come back in and push this market to the upside as the momentum has broken through so much in the way of resistance as of late. Because of this, the momentum has shifted to the upside and that will continue to attract a lot of attention. Remember, crypto is very heavily momentum-driven, and a lot of retail traders will be jumping on as well.

The area around the $50,000 level will almost certainly be very noisy, and a lot of people will be paying close attention. The $51,000 level being broken to the upside allows the market to go much higher, perhaps in more of a “buy-and-hold” type of scenario. On the other hand, if we were to break down below the 200-day EMA, we could re-enter the previous consolidation, but that seems less likely after the candlestick from the Tuesday session. Even if we do pull back into that area, as long as we stay above the $40,000 level I suspect that there will be plenty of people to get involved in this market. Those traders will be looking to follow right along to the upside and pick up “cheap Bitcoin.”

The Bitcoin market has been so broken down that it would not surprise me at all to see a complete reversal over the longer term, because so many people will have been waiting for this opportunity. Based upon the rectangle that we have just broken out of, it has a “measured move” to the $55,000 level. That being said, crypto markets tend to overshoot, so do not be surprised at all if we blow through there on some type of impulsive move.

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