(MENAFN- Daily Forex) Bitcoin markets initially fell during the trading session as people ran for cover after the military attack on Ukraine by Russia. That being said, we have turned around to form a bit of a hammer as we have bounced so hard. Nonetheless, the market has suggested that a little bit of a sigh of relief has just happened. The $35,000 level is also an area where you would expect a little bit of psychological and structural support, so with that being said it all adds up quite nicely.

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As Bitcoin is without a doubt a risk asset, it should not be a huge surprise to see that it has acted like a major commodity or some type of risky endeavor, as it has sold off at every hint of monetary policy tightening, conflict around the world, and simply just a stiff wind. Because of this, I think it makes a certain amount of sense that we will continue to see this situation expand, and probably weigh upon the Bitcoin markets overall. I think at this point in time it is likely that the market continues to see sellers every time it rallies, and I believe that the $40,000 level will probably cause significant trouble.

I do believe that Bitcoin has a relatively bright future, but just not at the moment. We will more than likely enter a“crypto winter”, unless of course the Federal Reserve starts to loosen monetary policy. If it does, then we have an opportunity for Bitcoin to rally, but right now I just do not see that being as likely. With that being the case, I believe that we have a situation where the markets will continue to see plenty of reasons to sell, unless Jerome Powell himself suggests that the Fed is nowhere near tightening monetary policy in this environment. (Some people are suggesting that they should not be. However, at this point in time it is still just noise.)

Expect volatility and look for signs of exhaustion to start shorting again. I do believe that Bitcoin will break down through the lows of the day eventually and go looking towards the $30,000 level at the very least. Breaking down below there then opens up a move down to the $20,000 level. Unfortunately, the future does not look good for Bitcoin at the moment.

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