Bitcoin markets continue to do nothing during the trading session on Friday, gaining roughly $30 as I record this. The market continues to dance around the $6500 level, and volume continues to be very anemic. With that being the case, I think at this point a lot of the retail traders are starting to get out of bitcoin or are simply hanging on from higher levels. This I think is going to be the biggest problem with any eventual breakout. We have far too many home gamers that are so far underwater that they will be more than willing to dump off bitcoin at exorbitantly high prices. Think of how many people got involved in bitcoin late last year, and how far underwater they are. That is going to cause a massive overhang in this market, and almost certainly assures that there will be no “to the moon” rally.
However, that doesn’t mean we can’t break out. If we do it’s going to be more of a grind and will behave more like a mature market. That, unfortunately, will dissuade a lot of people from taking advantage of that move, but if we break above the $7000 level I think we could continue to go higher over the next several years. I believe that we could eventually see $20,000 on a breakout like that, but we are probably talking years, not months.
If we break down below the obvious support underneath extending down to the 5800 level, then the market will break to the 5000 level, and possibly even lower than that. The alternate scenario, of course, is that we drift sideways in the market essentially does nothing, putting most cryptocurrency traders into it, as they await for some type of volatility. Most professional traders I know have given up cryptocurrency at the time being because it’s so difficult to make significant gains.
