The market will more than likely have shallow pullbacks though, so I think that we are going to have plenty of people looking to pick up value.
Bitcoin fell a little bit during the course of the trading session on Monday to reach down towards the $46,000 level. Underneath there, we also have the $45,000 level offering support as well. Nonetheless, Bitcoin has been in an uptrend for quite a while, and I think we are going to continue this move to the upside based upon the previous bullish flag that was the sign that we are exiting the previous consolidation area. That consolidation area, measuring from $30,000 below to the $40,000 level above, suggested a $10,000 move, lighting up quite nicely with the $50,000 level.
The $50,000 level will attract a certain amount of headline attention obviously, and of course it is also an area that previously had been support. “Market memory” would have this market seen the $50,000 level as important, so I do think that we could get a little bit of a pullback. That being said, any pullback will more than likely attract a lot of attention. If we break above the $50,000 level on a daily close, then it is likely that the market could go looking towards the $55,000 level, as well as the $60,000 level after that.
Bitcoin continues to be an area that people are looking towards when it comes to the idea of running away from inflation, which is on the forefront of everyone’s mind. Bitcoin is starting to use the same reasoning as gold markets do, so I think we are likely to see this market take a bit of a momentum from the idea of inflation picking up, which of course continues to dominate the headlines. Furthermore, there would be a certain amount of demand due to the recent pullback.
To the downside, if we were to break down below the 50 day EMA, which is sitting just below the $40,000 level, it is likely that we could get a little bit of a breakdown, as it is an area that will be very noisy. I believe that we break down below the 50 day EMA or even lower than that area but if we were to suddenly plunge in that direction, I might have to rethink some things. The market will more than likely have shallow pullbacks though, so I think that we are going to have plenty of people looking to pick up value.