Bitcoin tests major uptrend line
Bitcoin fell initially during the trading session on Wednesday, reaching down towards the $10,500 level. There is a major trend line slicing through the $10,000 level currently, so it makes sense that we could see a bit of a bounce from here. This is a market that continues to see a lot of upward pressure, and quite frankly there are a lot of reasons out there that could continue to push this market higher, but at this point it’s very likely that the market is going to eventually find buyers.
Major technical confluence
There are a multitude of reasons to think that this area is going to hold as support, and the fact that the market initially fell but then bounced a bit later during the day shows me that there is a lot of interest in this area. This market has a major trend line sitting just above the $10,000 level, and the 50 day EMA is sitting right along this trend line as well. At this point, the market looks likely to continue to find buyers in that area because of this, and the simple fact that we are in and uptrend.
The $10,000 level courses rather supportive, and you can see that I have marked on the chart $2000 increments that continued to show interest from both buyers and sellers in this market. Bitcoin has gotten a bit of a boost for some time and it now looks as if we are getting close to major support and a potential continuation. That being said, if this area were to fail, it could lead to a big move down as well.
There are a ton of fundamental reasons why Bitcoin has been rallying as of late. The very first reason of course is that central banks around the world continue to ease monetary policy, and therefore fiat currency continues to struggle. Bitcoin is a perfect vehicle to avoid a lot of that fiat currency, and the fact that it is priced against a fiat currency, it makes quite a bit of sense that we should continue to grind higher if these policies continue.
Beyond that, we also have quite a bit of money flowing out of places like Venezuela, Iran, and even China. Bitcoin is one of the easiest ways to do this, and therefore we should continue to see money flow into the crypto currency markets in general, which of course Bitcoin is the biggest. Beyond this market, if Bitcoin continues to find interest, we should see most cryptocurrency rally. Beyond this, I think that the market is going to try to go higher based upon risk appetite.
The play going forward
The play going forward of course is to buy Bitcoin, as I have been saying for a while. At this point, the $12,000 level makes a decent target, as well as the $13,000 level and then eventually the $14,000 level. I have no interest in shorting bitcoin unless we were to close below the $9800 level, which could send this market down to the $8000 level rather quickly.