The question now is going to be whether this is accumulation, or if it is just simple consolidation on the way lower.
Keep in mind that the $18,000 level underneath could be a major support level, so I think a lot of people will be paying close attention to it. After all, has offered quite a bit of support, and has been important in the past. If we were to break down below there, it really could open the possibility of significant selling, and therefore it’s likely that Bitcoin would collapse down to the 15,000 level, possibly even down to the $12,000 level, where we had taken off from for this latest bullish run.
On the other hand, we could rally from here, but I think you have to pay close attention to the $23,000 level, and most certainly the $25,000 level. The $25,000 level is a large, round, psychologically significant figure and an area that had been important previously, as we had fallen rather hard from there. If we were to break above there, then you can start to make a significant push toward a bullish market. All things being equal, I think you are going to continue to see a lot of people and for this, but the fundamentals just don’t line up quite yet.
I think we continue to trade in a tight range, and therefore I think it’s worth looking at both the bottom and the top of the range, which I have marked clearly on the chart in a $7000 range. Ultimately, we will break out of this range and depending on which direction, we could have a huge move. This market continues to suffer at the hands of tight monetary policy, and a strengthening US dollar. I think that will continue to be the case going forward, and if the Federal Reserve remains tight, a lot of institutional money may avoid Bitcoin. The question now is going to be whether this is accumulation, or if it is just simple consolidation on the way lower.
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