(MENAFN- Daily Forex)

• We initially tried to rally a bit during the trading session here on Wednesday, only to turn around and fall significantly.
• The $110,000 level is an area that has offered support over the last couple of days, and it does look like it's trying to do so again.
• However, if we break down below the $110,000 level, then the $108,000 level is probably going to be a support level.

The 200 day EMA sits there as well. So, I think there's a lot going on that could offer support. But quite frankly, if we break down below the Friday candlestick of last week, October 10th, Bitcoin probably plunges to the $100,000 level and then gets crushed below there. That would be a major psychological loss for Bitcoin, and we could see a pretty significant drop.

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On the other hand, if we turn around and rally and break above the 50 day EMA, that would be a very bullish sign. I think really at this point, probably what we're looking at as a best case scenario, short term that is, would be a little bit of sideways action in this area. A little bit of sideways action between $110,000 and basically $115,000.

We Need to Prove StabilityEURUSD Chart by TradingView

I think it provides stability and the belief in Bitcoin that buyers will need in order to put a bunch of money back into this market. Bitcoin is extraordinarily volatile and very sensitive to a lot of risk, appetite based noise. And I'm hearing whispers of levered Ethereum traders getting blown up during the session. So that might be part of the problem here, at least in the short term. Now the question is, will the 200 day EMA be held? At this point, the market is in a state of proving itself, and therefore a bit of caution makes sense.

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