Even if you are not trading Bitcoin, the reality is that you need to pay close attention to it as long as you are interested in crypto at all.
The Bitcoin market pulled back significantly on Wednesday as the market has run out of steam. That being said, the market had previously seen three positive days in a row, and if we are in fact trying to do something along the lines of stabilizing or perhaps even trying to put in some kind of bottom, we will have a lot of noisy behavior like that. That being said, we seem to be focusing on the $35,000 level underneath, which is an area that has been noisy previously.
The market currently looks as if we are trying to figure out where to go next, and this has a lot to do with what is going on with the US dollar as well. That being said, the market is likely to see a lot of noisy behavior, so you need to be cautious with your position size, or at least recognize that you may have to ride through a lot of volatility. If we were to turn around and break to the upside, if we can get a daily close above the $41,000 level, we might have the opportunity to go much higher. To the downside, if we were to turn around a break down below the $30,000 level, then it is likely that the market will break down rather significantly, perhaps even raising down to the $20,000 level.
Either way, I think we are going to see a lot of noisy behavior so you need to add slowly, and I think given enough time this might end up being a bit of a bottoming process. Whether or not it is here or lower is still an open question, but at this point it certainly looks as if we are putting up a fight. Bitcoin of course is the leader when it comes to the crypto markets, so even if you are not trading Bitcoin, the reality is that you need to pay close attention to it as long as you are interested in crypto at all. If the market turned around and started rallying, you would more likely than not have the ability to buy most alt coins as well. I am positive longer term, but I recognize we still have a lot of concerns.
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