BTC/USD
Bitcoin rallied during trading on Friday to close out the week, gaining a little over 2.5% by the time I sat down to write this. However, we are still in the same consolidation that we have been in for what seems like forever, as I am almost positive $7000 will bring in fresh selling. If we do break above there, then it’s the $7500 level, followed by the downtrend line that we will need to contend with. To the downside, the $6000 level continues to offer support, and I think it may continue to do so in the short run. However, the highs keep getting lower, and that is indicative of a market that may eventually break down. Obviously, we have not done so yet so that’s a good sign, but right now I think it’s just a simple matter of time.
There are a lot of reasons people continue to believe in the bitcoin story, and while some of them make sense to me, the only thing I care about is the price. I’m a speculator, I’m not looking for some 30-year investment here. One thing I can tell you is that prices telling us the bitcoin is not ready to rally. That doesn’t mean it can’t, it just means that taking all of the information and as things stand right now, the market isn’t interested. That doesn’t mean that it won’t go to $20,000 someday, but then again it doesn’t mean that it won’t go to $0 as well.
Unfortunately, there was a lot of hype around this market last year, and far too many retail traders got involved at lofty levels. Now that the bubble has been popped, the question is whether or not anybody’s interested in coming back? It is not until we break above the downtrend line that I would consider putting money to work on the long side. As far as shorting is concerned, I have no problem with that on signs of exhaustion, but I also recognize that would be a short-term trade also.
