BTC/USD Forecast: Bitcoin Attempts Base
(MENAFN- Daily Forex) The bitcoin market initially fell on Monday but found enough support to stabilize near the $30,500 level. That being said, the market is more likely than not going to continue to be skittish at best, and I do think that any rally at this point is probably just a sign of more consolidation going forward than anything else.
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The $37,500 level underneath is a significant support level from the short term, as we have been grinding sideways for a while. However, even though the last couple of months have been slightly more positive every time we bounce, this last move was a little less impressive. Keep in mind that we ended up forming a shooting star right at the 50-day EMA, which is not a good look at all.
If we break it down below the $37,500 level, I think it signifies that Bitcoin is going to go quite a bit lower. At that juncture, $35,000 will be tested, and then possibly the $30,000 level. I do recognize that there are a lot of moving pieces out there, but right now the most important piece is going to be risk appetite. If risk appetite continues to deteriorate, there is no way in which Bitcoin will rally as it is so far out on the risk spectrum.
Remember, a lot of institutional money has flown into this market over the last couple of years, so this market will start to look very much like a mature market. In other words, people are only buying when they feel comfortable doing so, and the big players are now institutional funds, not retailers, who are willing to go“YOLO” every time they get a chance. I suspect that it is probably only a matter of time before a lot of retail leaves the space altogether.
Long gone are the 20% gains that we used to see in the day, and at this point, it is difficult for Bitcoin to gain 10% on a particular day. The volatility of the asset needs to drop for widespread adoption, and most certainly drop to have institutional money comfortable flowing into it. It is because of this that I think the longer we go sideways, the better it will be for the asset. However, if we break below the $35,000 level, things will be quite ugly.
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