Bitcoin Continues to Offer Shelter
- Range bound but positive
- Moving averages moving higher
- A new devaluing of fiats could push people to cryptos
Bitcoin continues to offer a bit of shoulder against central banks loosening monetary policy. After all, most major central banks are currently looking at either cutting rates or buying bonds, possibly even getting into other forms of quantitative easing. This devalues fiat currency, which has always been one of the main reasons people have run to the crypto market. Bitcoin is always the leader, and that’s no different now. All one has to do is look around the crypto markets to see that not all coins are equal to it anymore.
Although the market has been somewhat range-bound lately, the reality is that we have been grinding higher over the longer term. The market has been moving sideways for the last couple of months, but the moving averages are starting to move to the upside. This should offer some technical support, right along with the uptrend line that has now bounced the market to the upside yet again. This market tends to attract money through political chaos as well, and over the last several months we have seen money flowing into Bitcoin in places like China, Venezuela, and Middle Eastern countries.
Eventually, this market will break out of the range. It currently looks as if it will break to the upside, which would be a completion of the sluggish summertime trading. Now that institutional traders are starting to come back from the quiet season, we could start to see more money flow into this market.
The trade going forward
The trade going forward is the same as it has been for several months, which is to say that buyers will continue to come in and pick up Bitcoin every time it dips a bit. Yes, it has been slow as of late, but one thing that is crucial to pay attention to is the fact that there hasn’t been a concern about being above the $10,000 level. Overall, the market breaking above the top of the range, which is currently at the $12,000 level, allows for a potential measured move of $2750. That means the market can go looking towards $14,750 as a target, which makes sense considering that the $15,000 level will obviously attract a lot of attention.
If we were to break to the downside, it’s likely that we would go looking towards the 200-day EMA, which is currently trading just below the $8000 handle. The 200-day EMA should offer longer-term support, not to mention the fact that it is tied to a large, round, psychologically significant figure. This seems to be less likely at this point, but it is still a potential move, especially if headlines start to make people apprehensive about Bitcoin again. The best part of this setup is that we have been quiet for months, meaning the market is comfortable after the massive move. That in and of itself is bullish.