Bitcoin continues to show buying pressure
Bitcoin markets rallied slightly during the trading session on Wednesday as we continue to grind higher overall. This is a market that had been beaten down quite drastically over the last year or so, but here recently we have seen a lot of changes. It’s hard to tell whether or not it is one reason or the other, but at the end of the day price is truth.
Market participants continue to show faith
Looking at the bitcoin chart, it’s obvious the buyers have come back over the last couple of weeks. There are plenty of reasons to think that perhaps this is a turning point, not the least of which is that every time we sell off, the buyers come back the very next day. We have a slight uptrend line underneath that should continue to push this market to the upside with several other Yachts attached to this chart at various points.
The $5000 level of course will attract a lot of attention. The fact that we are above that level and have shown buyers there a couple of times now suggests that we are continuing to find new money coming back into the marketplace. The uptrend line of course also shows buying pressure, but beyond that we also have the 200 day EMA which is flattening out for the first time in ages and is probably going to be turning higher at this rate.
Below all of this, we have the 50 day EMA and read that is already starting to turn to the upside. That is a very bullish sign as we continue to see a lot of buying pressure and of course the fact that the 50 day EMA tends to do fairly well as support and resistance from a dynamic standpoint in the bitcoin market.
Patience will be needed
Patience will be the most important thing to have when it comes to trading the bitcoin market, because we are trying to turn the entire trend around. This is always a slow moving process, unless of course there was some type of major fundamental change. There really hasn’t been, but the “true believers” never quite gave up on cryptocurrency, and of course bitcoin will be the place that most people put money to work originally. After the bloodbath of the past year or so, this has driven a lot of retail traders out of the market.
Beyond that, it’s very likely that the same retail crowd that has been underwater for so long will be looking to sell bitcoin when it gets close to breakeven, as they will have avoided a drastic hit. After all, imagine buying bitcoin at $17,000 only to see a drop down to $3500. You would be more than willing to sell your bitcoin back to the market at that 17,000 level. Unfortunately, that is going to be one of the problems with momentum, that any time we get it there will be plenty of people trying to get out of the market who have been sweating bullets for months.
That being said, the momentum has shifted to the upside but the momentum is slow. This has become a much more mature type of market, and therefore the days of 15% gains are probably behind us.