(MENAFN- Daily Forex)
The btc/usd i nitially tried to rally during the day on Monday but continues to find sellers every time it rallies. Quite frankly, Bitcoin has no real shot at rallying for any significant amount of time anytime soon, because it is solely reliant on Federal Reserve monetary policy it seems. After all, Bitcoin has never existed in a time when the Federal Reserve was tightening, and while people had suggested that it was a hedge for inflation, it has been laid to waste.
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Ultimately, we don't really know what Bitcoin is going to end up being, because so far all it has accomplished has been to be a speculative asset. While there's nothing wrong with that, the reality is that we are still trying to figure out what the fundamentals will be that could push this market. The one thing that we have seen a correlation with has been the US dollar in the federal reserve . The interest rates rising in America have been an absolute hammer to the value of Bitcoin. Quite frankly, it looks as if Bitcoin can only function in a quantitative easing environment because it is supposed to be an antidote for fiat currency.Looking to Fade the Rally
If we do break higher, I suspect that the 50-Day ema comes into the picture as resistance, sitting right around the $18,000 level. The $18,000 level is an issue as well, as it had been previous support. With that being the case, I think that“market memory” comes into the picture and this is an area where we may have some problems. If we break above there, then obviously that would be very bullish, but I just don't see Bitcoin being able to do that, at least not doing that and sustaining the necessary pressure. It is not until we break above the $22,000 level that you can have a serious argument that perhaps we are bottoming.
On the downside, if we break down below the $16,000 level, then it's very possible that we go to the $15,000 level, maybe even down to the $12,000 level after that. It is at the $12,000 level that the entire move had begun a couple of years ago, so I think there would probably be some interest in trying to support the market in that general vicinity. Ultimately, this is a“fade the rally” scenario.
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