Bitcoin still reaching for support
Bitcoin has drifted a little bit lower in the early Tuesday trading, but quite frankly there is still plenty of support underneath it we can look to in order to find a buying opportunity. Remember, Bitcoin has been extraordinarily bullish of the last several months, and the occasional pullback certainly makes sense. In fact, it’s part of what fuels a longer-term rally, something that Bitcoin traders are painfully aware of after the last bubble popping.
With all of that in mind, let’s take a look at the charts and see if we can glean a couple of areas that are worth paying attention to, and perhaps give us some guidance as to where we should be looking to invest in the crypto world, as Bitcoin drives everything.
Multitude of support factors
There are a multitude of reasons to feel that there is support just below, not the least of which of course is the $10,000 level. We are currently $10 above that as I write this article but have been dancing around it for several days now. Beyond that, we have the 50 day EMA which is pictured in red on the chart, and of course the uptrend line. Those are all factors that might drive money into the market from a technical analysis standpoint.
Beyond that, we need to pay attention to the US dollar, and when you look at the greenback one of the easiest ways to discern whether it is strong or weak is to pay attention to how it does against the Euro. After all, the EUR/USD pair is the largest market in the world. As we are close to the bottom of the trading range, I suspect that the Euro could pick up a bit of momentum, and that should drive down the value of the US dollar which of course is the other side of this pair.
The trade going forward
The trade going forward is simply to buy Bitcoin as long as we can stay above the trend line, but even if we were to break down below that level I’m not necessarily ready to start selling. The $8000 level should also be rather supportive as well, based upon the recent action. Currently, it looks as if we are trying to find our footing, and then eventually go towards the $12,000 level. That was an area that has seen the lot of action, as it was very resistive recently. I suspect that area will be retested rather soon.
Bitcoin traders are used to a lot of volatility, so those who have been trading for a while won’t necessarily be concerned about a $2000 drop. At this point, it simply looks as if we are about to find buyers rather soon, and if you’ve been in this for a few months your base price is much lower anyway. To the upside, I suspect that if we can break above the $12,000 level we will then target $13,000 next, followed of course by the recent highs at $14,000.