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MENAFN- Daily Forex)
During the trading session on Friday we saw the Bitcoin market rallied a bit, as the $84,000 level was challenged again. This has happened multiple times as we, but we cannot break above there quite yet and therefore I think you need to pay close attention to that level. Furthermore, just above there we have the 200 Day EMA, closer to the $85,000 level, so I think we have a lot working against the idea of Bitcoin getting stronger, at least from the technical analysis standpoint.
The Problem isn't the Charts
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It's not the charting on Bitcoin that has me underwhelmed by the idea of piling into it. There are plenty of reasons to think that Bitcoin could struggle, not the least of which would be the fact that although the Federal Reserve might cut interest rates this year, they will be a long way from cutting them back to where we once were. Remember, Bitcoin is designed in reaction to work against the idea of super accommodative monetary policy, which we had seen out of the Federal Reserve for quite some time. At this juncture, it's likely that the Federal Reserve will have to remain tighter than they had been for years, and with this being the case, it's likely that Bitcoin won't have quite the momentum that it once did.
EURUSD Chart by TradingView
Furthermore, another thing to think about is the fact that Bitcoin is essentially an ETF on Wall Street now. In other words, institutions have control of it and it's very unlikely that we will see 15% gains in any particular session again. It's not impossible, but it will happen about as often as it happens with a stock. Short-term pullbacks make quite a bit of sense, and I do think that a lot of people out there will be more or less“dollar cost averaging” their position, which is exactly what I have been doing over the last several weeks. I believe that the $75,000 level underneath is the major support at the moment.
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