Bitcoin Threatening to Break Out

Leverage should be avoided at all costs, due to the fact that it can magnify losses just as quickly as you can magnify gains.

Bitcoin has rallied significantly during the session on Wednesday, and of course, Thursday has seen a little bit of follow-through. Because of this, the market is likely to continue seeing quite a bit of interest in this market, as Bitcoin will lead the rest of the crypto world. If the market was to break above the $24,000 level, that could be a sign of bullishness throughout the crypto world, at least for the short term.

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If we do get that breakout, then it’s likely that Bitcoin could go to the $28,000 level. The $20,000 level has been crucial and should be so again based upon “market memory.” The $20,000 level is the beginning of the resistance that extends to the $3200 level. That is basically where the 200 Day EMA is racing to, and therefore I think it makes quite a bit of sense that we would see that as a magnet for price. Anything above there would confirm a new uptrend in the Bitcoin market, which of course has been sold out quite drastically.

Having said that, market participants should be aware of the fact that if we are turning around for a bigger move, you should have plenty of time to get involved. Short-term pullbacks should continue to be buying opportunities, as there will be a lot of people looking to get involved. Value hunters will come in on the dips, etc.

That being said, the market breaking bank down below the $22,000 level could send this market to the 50 Day EMA. The 50 Day EMA being broken to the downside then opens up the possibility of a move down to the $20,000 level. Under there, we have the $18,000 level. This is where the bottom of Bitcoin could fall out, so pay close attention to that region, because if we break through there, we probably drop down to $12,000, an area that I think would be excellent for building up a huge position if we can get that type of value.

At this point, I think the only thing that you can count on is a lot of volatility, and therefore you need to position size accordingly. Leverage should be avoided at all costs, due to the fact that it can magnify losses just as quickly as you can magnify gains.

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