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Bitcoin Breaks Through Short-Term Support | by heidi


 


Bitcoin fell on Friday, which is bad news for the crypto markets in general. We have broken through short-term support from the last several days, and it now looks as if we are more than likely going to try to make a move towards the $40,000 level. Bitcoin is not a safe haven asset, so it is not a huge surprise to see that we are selling off at this point.


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There are signs that Vladimir Putin is preparing for an invasion of Ukraine, but at this point what really got the market scared was US officials suggesting that an invasion was “imminent.” Whether or not that is true is a completely different story, and could just be nonsense. To the upside, I see a significant amount of resistance above at the 200 day EMA, which currently sits at the top of the Thursday and Tuesday candlesticks. The 200 day EMA of course offers a lot of technical interest, and it is likely that we will see a lot of bouncing back and forth.


If we break down below the bottom of the candlestick for Friday, it almost guarantees that we will go looking towards the $40,000 level. $40,000 is a large, round, psychologically significant figure that a lot of people would pay close attention to. If we break down below there, then I think we could go looking towards the $36,000 level again. If we break down below there, then the market is likely to continue going even lower, perhaps opening up the possibility of a complete flush lower. I would love to see that, because it means that we will be able to pick up Bitcoin “on the cheap” and could even kick off an attempt to get down to the $30,000 level and beyond.


On the other hand, if we can break above the 200 day EMA in a recovery move, that could open up the possibility of moving towards the $50,000 level. That obviously would be a very bullish sign, and if we can break above there then it is likely that the market could go much higher after that. This is a market that I think will struggle to do so, and I still think we have further downside more than anything else.