Bitcoin tends to move very wildly in short bursts, and then go sideways for what seems like forever.
The Bitcoin market fell during the trading session on Thursday as we hit towards the $ 18,000 level. We have bounced from there a little, but we are still likely to see more sales, just because the market has a lot of work to do in order to spend the huge gains seen before. We had formed a hammer during the trading session on Wednesday, and the candlestick on Thursday seems to support that. We’ll probably keep going lower in the short term, but eventually we’ll see a turnaround.
What’s interesting is that the US dollar fell during the day, but Bitcoin didn’t take advantage of it. I don’t think this means anything other than the fact that Bitcoin may be overestimated at the moment, which should be obvious to anyone who’s been paying attention. I think a breakdown to the $ 16,000 level would be very healthy, but I recognize that we may not even have that kind of sale. The alternative scenario is to grind to the side between the $ 18,000 level and the $ 20,000 level in order for the market to get used to the idea of being up here. The real question now will be whether the market can break above the psychological barrier at $ 20,000. Remember, this is where the market fell apart a few years ago and completely crashed. I do not think that is imminent now, but there is some psychological resistance in this area. It would come as no surprise to me if many retail traders swap at this point just to get back into cost recovery.
What is needed next will be a fundamental reason to buy Bitcoin. This is likely to be the further decline of the US dollar, but for now killing time is probably the most likely scenario going forward. Remember, Bitcoin tends to move very wildly in short bursts, and then go sideways for what seems like forever. Because of this, none of these steps I see on the chart is particularly unique right now.
