The BTC/USD market has fallen significantly during the trading session on Friday, losing over 7% as the market is now approaching the $21,000 level. The 50 Day EMA has been left in the rearview mirror, and now it looks like we are very likely to see Bitcoin drop down to the $20000 region quite quickly.

• The $20,000 level has a certain amount of psychology attached to it, and it would also cause a lot of noise.
• That’s an area where we had seen a lot of support previously, so that is an area where you would anticipate there should be some buyers based upon value. 
• If we were to break down below that level, it’s likely that the market would probably drop down to the $12,000 level. It is at the $12,000 level that a lot of people believe that the market will bottom.

The $12,000 level is where we broke out from previously, so it would be a complete round trip for what we had done during the last bullish move, and at this point, I think it would not be a huge surprise to see that happen. The $25,000 level had been a major resistance and psychological barrier, and the fact that we have pulled away from it so quickly now, suggests to me that there is going to be some follow-through. After all, the market continues to see a lot of risk appetite being eviscerated, and that is horrible for Bitcoin. After all, Bitcoin is pretty far out on the risk spectrum, and therefore times have to be good in order for Bitcoin to continue going higher.

The size of the candlestick does suggest that we have much further to go, and with that being the case, it’s likely that we will try to see plenty of sellers willing to step into this market at the first signs of exhaustion. I think the US dollar is going to continue to cause major issues, and as long as that’s going to be the case, nothing is going to get in its way, including cryptocurrency. Bitcoin is likely to take a punch in the face over the next couple of weeks, but if we were to turn around and rise above the $25,000 level, it would be a complete change of scenery, opening up a potential move to the $20,000 level.

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I still think that it is easier for the euro to fall than rise, but that does not necessarily mean we will get that move.

The euro broke higher on Wednesday as rumors broke out that perhaps the Russians and the Ukrainians could come to some type of peace agreement. Since then, we have seen a little bit of walking back, so now the question is whether or not there is any hope? The euro rallied as a result, but it is short-term at best. As you can see, the euro tested the 50-day EMA, and even the 1.11 handle before pulling back a bit. This is a market that has been in a downtrend long before the war, and for many other reasons.

The 1.10 level underneath might be the target, but it might also take a little bit of time to get there. If we were to break down below the 1.10 level, then it is possible that we could break all the way down to the 1.08 level. The market has seen a lot of resistance just above, and it has been confirmed during the session on Wednesday. That being said, it is not that anything can be guaranteed, but it certainly looks as if it is an area where we are going to run into trouble.

The area between 1.11 and 1.12 is a huge barrier of resistance, so I do think it makes sense that we would struggle in that region. Ultimately, this is a market that needs to break above the 1.12 level to be impressive enough to start buying. If that were to happen, then it is possible that the euro could go looking towards the 200-day EMA, possibly even the 1.15 handle. That obviously would be a complete change in attitude, but it remains to be seen whether or not that could actually happen.

We are still very much in a downtrend, and that is something that you should keep in the back of your mind. Because of this, I still think that it is easier for the euro to fall than rise, but that does not necessarily mean we will get that move. The US dollar will get strengthened due to more of a “risk-off” type of attitude, or the simple fact that the European economy is a bit of a mess. This is not so much about the dollar at the moment though, it is more about the euro.