BTC/USD Forecast: Bitcoin Attempting To Build Base
Date
5/31/2022 4:08:14 AM
(MENAFN- Daily Forex) bitcoin rallied a bit on Monday, as it looks like we are trying to build enough support for a base. That being said, the market is still very much in a consolidation area, so it'll be interesting to see if we can continue going higher. It's probably worth noting that the market has been beaten down rather hard and for good reason. crypto has a fraud problem that's being exposed, and even though it's not necessarily based around Bitcoin, it has people running from everything.
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When you look at the last couple of weeks, you can see clearly that we are consolidating. However, the last time we were consolidating like this we were near the $40,000 level before the bottom fell out. That resulted in a 25% drop, so you can't simply jump into Bitcoin and buy with both hands. At this point, I think we are about to make a pretty big move, but I don't know the direction quite yet.
If history is any indication, it's likely that we will go lower rather than higher. If we break down below the $28,000 level, I suspect that we are going to drop down to the $25,000 level, possibly even as low as $20,000. With all of the negativity around the crypto markets right now, it would not surprise me at all, and would probably drag the rest of the crypto markets down with it. Because of this, I would not only start shorting Bitcoin, but I would probably jump all over the smaller altcoins as well. In this environment, the best rate in crypto is to short smaller markets, as they stand no real chance.
Think of Bitcoin as the bellwether for the entire crypto market, and it's not until we break above the 200-day EMA that you can technically say that we are in an uptrend. That is currently at $41,000. Bitcoin and the rest of crypto look miserable right now, so if you have the opportunity to take advantage of falling prices, that's what would be the most profitable route. However, if you're more of an investor, you could start to build up small bits and pieces of a larger position, understanding that it may be a few years before those positions pay off. It comes down to timeframe at this point.
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