Bitcoin continues to tread water
The Bitcoin markets have been rather sideways over the last couple of weeks but quite frankly that’s a good thing. After all, we had rallied rather significantly over the last several months and find ourselves tripling the value of Bitcoin in a short amount of time so the fact that we are taking a breather makes a lot of sense, and quite frankly is the attitude of a healthy market.
Previously, we had this market go straight up in the air and we all remember how that ended. If Bitcoin is going to hold its value, then it needs to be able to consolidate and digest gains occasionally. At this point, it’s very unlikely that we are going to see this market explode to the upside, but I don’t necessarily think we break down from here either. In fact, I see a couple of levels to pay attention to.
Support and resistance levels
The $10,000 level underneath continues to be massive support, and I think that as long as we can hold above that area the market is an excellent sign of strength, and the market could very well go looking towards the $14,000 handle after that. The $14,000 level is massive resistance, so I think essentially we are consolidating and the $4000 range. The $12,000 level is of course the “fair value” for the market, so at this point I think we are essentially at “fair value.”
As long as we stay in this range, I like buying dips because we certainly have more bullish pressure than bearish, and the 50 day EMA is starting to run higher and towards the $10,000 level. At this point, it’s very likely that it should continue to be an area that matches up quite nicely with the overall attitude of the market.
The Federal Reserve is going to cut interest rates later this month, and that of course works against the value of the US dollar. The value of the US dollar does have an influence on this market, as it is the same thing as a Forex pair, despite what a lot of cryptocurrency traders would tell you. If the US dollar is falling, Bitcoin should rise. Quite frankly, if Bitcoin falls why the US dollar does, that’s a very bad sign for Bitcoin.
All things being equal it looks as if the central market will continue to be very dovish, and I think that we are looking at a scenario where buying the dips should continue to go forward, driving the market above 14,000 eventually. It’s going to take some time to make that happen, but right now we are trying to build up the necessary momentum and basing pattern to make it a reality. Look at dips as value, especially if you are a longer-term type of investor who’s looking to hold onto Bitcoin for the long haul. However, if we break down below the $10,000 level, we could then drop to the $8000 level underneath that.