BTC/USD Forecast: Bitcoin Looks Soft

As long as we do not have an environment where a lot of people are willing to speculate large amounts of money, Bitcoin stands no real chance.

  • The BTC/USD pair drifted a bit lower Tuesday as we continue to see a lot of hesitation. 
  • Bitcoin has no real chance of rallying for a bigger move until the financial situation changes.
  • As long as the Federal Reserve looks likely to continue tightening monetary policy, there will not be much in the way of risk-taking from larger institutional investors.

Looking at this chart, you can see that the 50-day EMA has offered dynamic resistance and is likely that we will continue to see traders pay close attention to it. This is especially true with Bitcoin, as it seems to be such a technically driven asset. After all, is merely a speculative asset, and not something that has anything along the lines of a dividend, nor is it easy to look at fundamentals for Bitcoin because quite frankly we don’t know what Bitcoin will be in the end.

What is Bitcoin Really?

We have been told a lot of different things, and it does not take a lot of imagination to assume that Bitcoin can cure every problem that man faces. That being said, we have seen various theories debunked, such as it was a store of value, it was an inflation hedge, it was a currency, it was “digital gold”, and private. None of them was proven to be correct, so now we are still trying to figure out its real use.

This sets it up as a market that tends to follow a lot of technical analysis because it’s almost impossible to value Bitcoin like you can a real-life asset that is physical and can easily be seen. For example, if you are trying to value something like Walmart, you can take a lot of different metrics and calculate what the value of the company is. After all, even if Walmart imploded, you still have some value there, be it real estate, inventory, etc.

As long as we do not have an environment where a lot of people are willing to speculate large amounts of money, Bitcoin stands no real chance. If we break it down below the $18,000 level, then it’s possible that Bitcoin is going to continue to drop significantly, perhaps even dropping all the way down to the $12,000 level where I think a lot of people will be willing to jump in and start picking up more Bitcoin for a bigger move.


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