(MENAFN- Daily Forex) Bitcoin initially tried to rally on Tuesday but gave back gains to show signs of hesitation again. The area above the $40,000 level will continue to be important, as it is a large, round, psychologically significant figure, and it is an area where we had seen a lot of action. This market looks as if we are trying to do everything we can to build up momentum to break one way or another, so it is important to pay close attention to where we go next.

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The 50-day EMA is at $42,000 and dropping. At this point, the market is likely to see that area as a major barrier. If we were to break above the 50-day EMA, then it is likely that the market could go looking to the 200-day EMA above there, which is hanging about the $44,000 level. The area between the 50-day EMA and the 200-day EMA is likely to be very noisy. Because of this, I anticipate that rallies will be looked at with suspicion. Furthermore, the market has been consolidating for so long that it is difficult to imagine that we are simply going to rip to the upside.

Keep in mind that risk appetite has a major influence on what happens in the Bitcoin market because it is pretty far out on the risk appetite spectrum. As long as there are concerns around the world, it is difficult to imagine a scenario where people simply start dumping money into the Bitcoin market, especially institutional investors. Keep in mind that now that we have institutional money in this market, it will behave much more like established ones. The days of 20% gains are long gone and you need to think of it along the lines of a traditional market.

Underneath, the $35,000 level continues to be a major support barrier, and if we were to break down below that level, it would end up being a very negative turn of events. The market breaking down below there could open up“crypto winter” when all crypto performs very poorly. On the other hand, if we were to break above the $45,000 level, the market could go looking to reach the crucial $50,000 level, but that would take a Herculean effort.

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