I think that if we get a little bit of a rally at this point, you should look for signs of exhaustion to start shorting again.
Bitcoin fell significantly on Wednesday as we begin the month of June. The “end of the month markup” that some of the larger holders have done is something that’s somewhat common in years gone by with the regulated markets, but now that the Bitcoin markets have attracted institutional money that is not regulated quite as severely, you will see these types of gains.
That being said, the market is likely to continue seeing the $30,000 level as a potential area of interest, and if we can break down below the recent lows, then it’s likely that we would go much further to the downside, perhaps opening up the possibility of a move down to the $25,000 level, maybe even the $20,000 level. Crypto has a serious problem as massive fraud and Ponzi schemes are starting to come to light, and while the Bitcoin market is not necessarily one of those, it is going to get a bit of negativity thrown at it due to the fact that some of its peers are so shady, to say the least.
The size of the candlestick certainly suggests that we are going to see further downward pressure, especially as the market has been so negative for so long. If we were to rally to the upside, the $32,500 level being broken would be bullish, but you would then immediately have to deal with the 50-day EMA, and then possibly even the $37,500 region. It is not until we can break above the $40,000 level that I would be impressed with the move, which is a 33% gain from current levels. In other words, Bitcoin has a long way to go before it changes its overall attitude, so Idon’t have any interest in trying to buy this market. I think that if we get a little bit of a rally at this point, you should look for signs of exhaustion to start shorting again.
If you are bullish for the longer-term when it comes to Bitcoin, you probably have an opportunity to buy it at much lower levels. As monetary policy tightens around the world, it kills one of the main tenets of crypto, because money becomes a lot less available. The whole “anti-inflationary theme” has been killed, so now we have to come up with another reason for Bitcoin to exist.