For those who are trying to take advantage of short-term moves, this is a market that looks more range-bound than anything else.
Bitcoin markets rallied on Wednesday as the $40,000 level has offered a significant amount of support. By doing so, it did save itself in the sense that we did not break down through a bulk of the support. That being said, we do have further to go as far as recovery, so keep that in mind. The size of the candlestick is somewhat normal, so I do not read too much into this other than that the $40,000 level sits at the very bottom of it. If we can continue to go higher, then it is very likely that the 50-day EMA is going to come into the picture and offer a significant amount of resistance.
Bitcoin continues to suffer at the hands of a major “risk-off” type of situation, and I think that will continue to be the case. Remember that Bitcoin is far out on the risk spectrum, and now that more institutional traders are involved in the market, it certainly makes sense that we would see Bitcoin behave as such. After all, institutional investors are not going to be jumping into the Bitcoin markets if they are expecting a lot of economic turbulence ahead.
If we break down below the $37,500 level, then I think Bitcoin could go looking towards the $35,000 level, which opens up the door to the $30,000 level if we break through there. On the upside, we could go as high as $45,000 in the short term, keeping in mind that the 200-day EMA is right in that same area. Looking at this chart, the most recent low was a little bit higher than the one before it, so that is a good sign, but it is obvious that we have a lot of work to do before we can get truly bullish. If you are a longer-term trader, it may be different, but for those who are trying to take advantage of short-term moves, this is a market that looks more range-bound than anything else.
At this point, I think that you need to be cautious with your position size, mainly due to the fact that the volatility in choppiness has been rather strong, and I think that will continue to be the case over the next several weeks, if not months.
