Bitcoin Rallies to Test Resistance Again

A lot of this is going to come down to the Federal Reserve as well, as we are watching inflation very closely.

• The BTC/USD currency pair rallied a bit Monday as we continue to see quite a bit of buying pressure.
• Ultimately, this is a market that has to pay close attention to risk appetite globally, especially as Bitcoin is so volatile.
• If risk appetite starts to fall off, Bitcoin could get slammed.
• BlackRock has recently got involved in Bitcoin via Coinbase, and it plans on offering Bitcoin to 200 institutional clients.

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Technical Analysis

If we do break above the $25,000 level, it’s likely that the bitcoin market could go to the $28,000 level. The $28,000 level is the beginning of rather significant resistance that extends all the way to the $32,000 level. The $32,000 level being broken to the upside could send this market much higher, thereby kicking off a bullish run. I don’t think that’s going to be the case anytime soon, but it’s something to keep in the back of your mind. If we were to break out above there, then we go much higher.

If we turn around and break down below the 50-day EMA, then it could open up quite a bit of selling pressure, opening up the possibility of reaching the $20,000 level. The $20,000 level obviously has a significant amount of psychology attached to it, so you should pay close attention if we do break down below it. If we do, that could open up quite a bit of selling pressure, causing a lot of noise. In that scenario, Bitcoin could see the bottom fall out of it. I don’t necessarily think that’s going to be the case, at least not in the short term. However, if we do get that breakdown, it might lead to a nice drop down to the $12,000 level. The $12,000 level is an area that a lot of people have an interest in, so I think that might be the beginning of the building of a major accumulation phase. At that point, we would probably see a lot of sideways action before ultimately turning things around and kicking off a new bullish trend. If we don’t, that would be an extraordinarily negative turn of events for Bitcoin. A lot of this is going to come down to the Federal Reserve as well, as we are watching inflation very closely.

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