Bitcoin exploded higher during the course of the session on Wednesday, rising just under 7%. This is a very strong move, as we have bounced off the 200 day EMA. This suggests that we may be doing everything we can to take off, but there is a lot of noise just above. I think at this point we have to look at this market as being in the process of making a larger move, but if it does in fact, I would have to assume that you have plenty of time to get involved.
Looking at this chart, the most obvious feature would be the $25,000 level, and I think it offers quite a bit of selling pressure. I think there are plenty of sellers out there waiting to get involved between the $24,000 level and the $25,000 level. On the other hand, if we were to turn around and break down below the 200 day EMA, that would obviously be a very negative turn of events. I do not anticipate that happening anytime soon, especially after we saw this move on Wednesday. Whether or not we can break out is a completely different question, but we clearly do have a certain number of buyers underneath that will probably get involved.
I anticipate choppy and noisy behavior, but we may get more of a “risk on” sentiment in the markets, so I think we have a situation where Bitcoin can really take off. In this environment, I expect that not only will Bitcoin take off, but you may see a lot of other cryptocurrencies doing the same. The question now is whether or not we have bottomed out. After all, the cryptocurrency has been hammered for the last year or so, but that is going to turn around very quickly, so I am a little apprehensive at the moment. I think in general it is best to be cautious at this point, because you could be ready to fail if you get too exposed to Bitcoin. However, pay close attention to the $25,000 level because it will indicate the next direction to some degree.
