I would not get too excited about any rally at this point though, because the trend is most decidedly against crypto in general.
The Bitcoin market fell significantly on Tuesday but found enough psychological and structural support near the $30,000 level to bounce a bit. The resulting candlestick was somewhat neutral, and I would also point out that the volume was rather strong. This could be a short-term bottom, but at this point, it is premature to think that the trend is suddenly going to change.
Looking at this chart, if we were to break down below the $30,000 level, I think at that point you would start to have serious thoughts about a “crypto winter”, as it would more than likely have people running away from the entire crypto space in general. You would see smaller coins get eviscerated, while Bitcoin would probably do almost nothing at lower levels.
While I do not necessarily think that Bitcoin is going to zero, we are certainly pressing the issue at this point and one would have to think that it may not take too much to get Bitcoin to break down. The CPI numbers coming out of America during the trading session on Wednesday could be the next catalyst because it could drive the US dollar much higher, which would work against Bitcoin in general. On the other hand, if there is less likelihood of an aggressive Federal Reserve after the CPI figure, a falling US dollar might allow Bitcoin to rally a bit.
I would not get too excited about any rally at this point though, because the trend is most decidedly against crypto in general. Furthermore, the US dollar will continue to be bullish from a longer-term standpoint, mainly because there is a lot of risk aversion out there. In other words, I think any rally at this point will more than likely be an opportunity to start shorting again. As far as buying is concerned, I do not have any interest in doing so, and as things stand right now we would have to wipe out the candlestick from the Monday session at the very least. As things stand, crypto does not look very healthy, and at this point, I would be very cautious about buying any. I know that a lot of people jumped in with Michael Saylor during the trading session as this is roughly near his cost basis, but that has nothing to do with anything that can make your money.