- Crypto has been consolidating
- Bitcoin tracing 50 day EMA
- Central banks in focus
The Bitcoin market has been somewhat flat over the last couple of weeks, tracing the 50 day EMA which is quite typical of a market that is holding its breath and waiting for the next catalyst. These few weeks see interest rate decisions by a plethora of central banks, with over 30 of them looking to ease monetary policy. This supports the idea that alternative investments can move away from fiat currency rallying.
Consolidation and beyond
Consolidation is probably one of the most obvious ways to describe this market, but one thing that traders should be aware of is the fact that the market had rallied 170% recently. That’s an enormous move and the idea of grinding sideways for a couple of months after that is not out of bounds. In fact, it’s a sign that the Bitcoin market may be maturing enough to attract even more money. Hopefully, 20% gains in one day are going to be very common. That is the type of volatility that scares big money away from the market. Beyond that, it’s also a sign that the market can be easily manipulated, a point that charges have been bandied about for the last few years. The more liquid the market becomes, the less volatile it becomes, and the more stable it becomes. All of those are big in the eyes of the larger investors.
Technical set up
The technical analysis in this market is relatively flat right now, but when looked at through the prism of the last few months, it makes perfect sense. The question isn’t so much as to whether or not people are paying attention to the market but whether or not this is accumulation or distribution? It might be a bit of both, as those who got in at extraordinarily low levels are probably more than willing to take some of the profits off the table. However, the longer this market hangs about this area of the more likely we are to see fresh money coming into this arena.
The $9250 level underneath continues to offer plenty of support, and it is the bottom of the recent consolidation. Any sign of support in that area will attract a lot of people into the market to start buying. Ultimately, the $12,000 level above is massive resistance, and therefore it’s very likely that the sellers will defend it going forward. However, the measured move on a breakout above there could send this market looking towards the $14,750 level, which is just underneath the psychologically and structurally important $15,000 level, which makes quite a bit of sense. Essentially though, if we break down below the $9250 level we could probably go looking towards the $8000 level underneath which is the scene of the 200 day EMA. However, it still looks as if the buyers are willing to come in and defend, so the upside is still the most likely destination.