Bitcoin markets did very little during the day on Tuesday, as we continue to go back and forth and sideways around the $3600 level. We have the 20 day EMA just above that is offering a bit of resistance and turning lower. Beyond that, we have a downtrend line that has not been broken and of course the most volume that we have seen in a couple of weeks was in a very negative candle stick. All that being the case, it’s looking very likely that we are going to continue to see selling pressure.
I also recognize that the $4000 level above should be resistance based upon the psychological importance of the round figure, and of course that previously mentioned downtrend line. Any signs of exhaustion after a rally near that area should be a nice selling opportunity, as rallies continued to get stepped on rather quickly. After all, bitcoin has been falling apart for some time, and there seems to be no letup in this trend, unless of course you count going sideways overall.
If we break higher and above that downtrend line, then we could go looking towards the 50 day EMA, closer to the $4300 level. At that point I would expect to see sellers as well but quite frankly if we do break above the downtrend line I suspect that the 50 day EMA won’t be as resistive. It would not surprise me at all that we would make a move towards $5000 at that point. However, I believe that the downtrend is firmly ensconced in this market, and a break down below the $3500 level should send this market closer to the $3000 level underneath. In fact, that’s my base case but obviously we need to see volume picked up.
This article provided by NewsEdge.