Bitcoin continues to grind in an upward fashion
The bitcoin markets of course have been very bullish over the last several months, as everyone knows. However, the last couple of weeks have been more of a fight than we had gotten used to. Unfortunately, Bitcoin is a market that tends to attract a lot of people that expect 10% moves on a daily basis. As the market matures, this will become less likely to happen on any given day, and this could perhaps be part of what we are seeing at this point.
Some of the newest players in the market are going to be large institutions. This is a bit of a double edge sword, because one of the things that made Bitcoin so attractive a couple of years ago is that it could move 15% in the day, but institutions coming into the market adds a lot more in the way of volume. That volume works in both directions, thereby crushing some of the volatility. That being said, it doesn’t mean that we can have the occasional strong day like that, it’s just that they will become much less likely.
Quite frankly, that’s a good thing. If Bitcoin is ever going to be adopted from a longer-term standpoint, it needs to be a bit more stable. One thing that most Bitcoin traders forget is that it is supposed to be money. Imagine a scenario where you sell something for $12,000 on Thursday, only to find out that that $12,000 is worth just $7500 on Sunday. You can see the obvious issue here. As institutions come in and start placing large orders in the market, it should slow the market down a bit.
The obvious trend is to the upside, and as we start out the Tuesday session we have broken above the $12,000 level handily. We are starting to see a bit of selling, but quite frankly that would be expected as we are getting close to the top of the major selling area at $14,000 above. This is your garden-variety pullback in a market that is trying to build up enough momentum to finally break out to the upside. Remember, we had recently been talking about the $10,000 level as crucial support, and it has in fact held.
Speaking of which, as long as we are above the $10,000 level, there’s no reason to think that this market is one that you should be selling. You can see that the 50 day EMA which is pictured in red on the chart has been reasonably reliable over the longer-term, and quite frankly at this point needs to play catch-up.
All things being equal, the trend is obvious and therefore you should lean to buying and never sell this market as long as we are above $10,000. Look at short-term pullbacks as buying opportunities to continue to grow your position.
Other related news
Bitcoin continues to look strong
by Kate Leaman | 19 August 2019
Ethereum on the precipice
by Kate Leaman | 16 August 2019
Bitcoin showing resiliency
by Kate Leaman | 15 August 2019