• The BTC/USD has done very little during the trading session on Wednesday as we continue to wait around for some type of signal.
• At this point in time, it’s obvious that the $18,000 level is a major support level, and therefore I think it’s only a matter of time before we must make a major decision about this area.
• After all, the $18,000 level has held for months, but it’s worth noting that we have not been able to break through it.

Therefore, I think breaking through the $18,000 level will be extraordinarily negative for this market. I do think that if this keeps up, we will eventually, because quite frankly Bitcoin and the rest of cryptocurrency has lost the interest of the average trader. In the institutional world, Bitcoin is not necessarily favored either, simply because the risk appetite is just not out there. Remember, the big money that jumps into Bitcoin is not using it to make some type of statement, they are trying to bet on generating Alpha. They do not care whether it ever gets adopted, they just want the price to move in the right direction. In a world where institutions can trade in multiple assets, there’s no reason to take extraordinarily high risky trades while even the bond market is unstable.
 

Looking to Fade Short-term Rallies

The Federal Reserve will have to jump in and loosen monetary policy before cryptocurrency in general rallies. It’s a bit ironic because Bitcoin is supposed to work outside of the normal financial system, but that clearly has not been the reality. With that being the case, think we got a situation where most of the big money is simply waiting for cheap and free money to get involved again. Because of this, I think this remains a scenario where you are looking to fade short-term rallies, at least until either the Fed decides to change its monetary policy, or we can break above the $25,000 level. I don’t see that happening, especially as the 200-Day EMA sits just above there. If we do break down below the $18,000 level, I think we finally work our way down to the $12,000 level, where we had started the last bullish market from. This would be a complete “round-trip”, something that Bitcoin is done before.

(Click on image to enlarge)