If the Bitcoin market were to break down below the $18,000 level, then it’s likely that the bottom will fall out, and Bitcoin will flush much lower. 

If the Bitcoin market were to break down below the $18,000 level, then it’s likely that the bottom will fall out, and Bitcoin will flush much lower. This is a market that I think is going to continue to see a lot of volatility and a lot of downward momentum. If we break down below the $18,000 level, it opens the possibility of a move down to the $15,000 level, which is a significant move, but after that, we could be looking at $12,000 rather quickly as it is a much more technically important level.

Federal Reserve’s Policy Doesn’t Favor Bitcoin

On the upside, the 50-Day EMA will continue to be an issue, so therefore I think you need to pay close attention to whether we can hang on to any type of momentum, and even breaking that would not wipe out the candlestick from the Tuesday session. In fact, it’s not that we break above the $25,000 level that I would take the Bitcoin rally seriously at all. I just don’t see that happening, so I think this remains a “pay the rally” type of situation.

It is ironic that traders will need the Federal Reserve to come to bail them out because I’m old enough to remember when crypto was the way to get away from central banks. They need the Federal Reserve to stop tightening monetary policy, or the pricing of Bitcoin will continue to be very weak, to say the least. Until the Federal Reserve changes its overall monetary policy, I just do not see how this market has any real pricing power, and I do think that every time it rallies people will start to sell it yet again. Bitcoin has further to go.

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