Bitcoin pulled back a bit during the Monday session, losing 1%. However, we are in an area that provided support several times in the past and now looks significant from a short-term perspective. The $21,000 level has been an area that people have been battling for for a while, so it makes sense to see this chaos in this area.
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I anticipate that there is likely to be a lot of support extending into the $20,000 level, and in this area I would expect there to be a lot of buyers. However, if we break below the $20,000 level, it is likely that the Bitcoin market will start to decline significantly, and may drag the rest of the cryptocurrency markets with it. It is worth noting that the US dollar is strengthening significantly, and therefore this will have an impact on Bitcoin. Moreover, as monetary policy continues to tighten, people will worry about risk appetite. Lower risk appetite leads to lower prices for Bitcoin and other cryptocurrencies in general.
Rallies at this point are likely to be viewed with skepticism, with the 50 day EMA below the $24,000 level providing a bit of resistance. Next, we have the $25,000 level, which recently provided a lot of selling pressure. For this reason, I think you should continue to look at this market from the perspective of a market that is in a downtrend, which has not changed. In fact, it is very likely that we will continue to see a lot of downside pressure, and a break below the $20,000 level could start a bigger move lower. If that happens, it is possible that we will see Bitcoin drop all the way down to the $12,000 level over the longer term. It is worth noting that the entire upward trend started from the $12,000 level.
To the upside, if we can break the $25,000 level, we will likely move towards the $28,000 level, which is the start of a major noise zone extending all the way to the $32,000 level.
The chart was generated by . platform TradingView