It does look like we are stabilizing a bit, but we do not have a decisive move one way or another to put any money to work quite yet.

Image Source: Unsplash

The Bitcoin market rallied a bit during the trading session but still struggles to get above the $40,000 level. Ultimately, the market is going to continue to see a lot of interest in this area not only due to the big figure but also the fact that the 200-day EMA is sitting in that general vicinity. The market is likely to see noisy behavior in this general vicinity, but this is a good thing, considering that the market had fallen so hard; we need to see a little bit of the sideways action that we have because it tells us that perhaps people are willing to hang out and stick with the asset.

Looking at this chart, the $30,000 level underneath is massive support, and I think at this point it is likely that we will see a lot of people pay close attention to this area. If we can get an impulsive candle to the upside and see the market stay above the $40,000 level on the close, then the market could be looking at a move towards the $50,000 level above. The 50-day EMA is also breaking down below that level, so it does suggest that perhaps there could be quite a bit of resistance based not only upon that indication but the large, round, psychologically significant figure itself.

On the downside, if we were to break down below the $30,000 level, then it would be well below the 200-day EMA and could open up a move down to the $20,000 level. Keep in mind that Bitcoin has been shaken rather hard, so the longer we sit sideways, the better off things are going to be, as people may be a little bit more comfortable jumping into the market. With that being the case, I think when we look at this situation, it is likely that we will continue to struggle overall and need to see some type of impulsive candlestick. At this point, it does look like we are stabilizing a bit, but we do not have a decisive move one way or another to put any money to work quite yet. If you are a longer-term investor, then everything is fine I suppose, but if you are going to try to make a short-term trade, there is not much on the chart to give you guidance.

(Click on image to enlarge)