Be cautious about your position size
The Bitcoin market pulled back during the session on Tuesday to reach the $30,000 level yet again. This is a market that I think will continue to be drawn to that level like a magnet, because there’s no real reason to think that the crypto markets are going to change quite drastically. After all, the market is likely to see a lot of FUD out there, as the rest of the crypto markets have major issues. While it is not necessarily Bitcoin itself that has the issues, Bitcoin is the first place that people either go into or out of when it comes to crypto.
At this point, it looks as if the $28,000 level is being defended, and as long as we can stay above there, it’s likely that we will continue to see that level offer support. However, if we were to break down below the $28,000 level, it opens up the possibility of a move down to the $25,000 level. After that move, Bitcoin could drop all the way down to the $20,000 region. Anything below there could be catastrophic and open up a move all the way down to the $12,000 area.
More likely than not, we will continue to see a lot of volatility more than anything else, so need to be cautious about your position size. More likely than not, it’s probably going to be a situation where we see chop, and a lot of concern. There have been a lot of fraudulent situations in the crypto markets, and this has had a bit of a “knock-on effect” over here. If we continue to see the same action, it’s more likely than not we will more or less see Brownian motion.
If we were to break above the 50 Day EMA, which is near the $32,500 level, and sloping lower. If we turn around and break out above there, then it’s likely that Bitcoin could go to the $37,500 level. There is a lot of resistance just above there that extends to the $40,000 level, so I think it’s worth paying close attention to. It’s not that we break above the $40,000 level that I think Bitcoin will have completely beaten back the selling pressure, something that is not going to happen anytime soon.