It’s worth noting that some parts of the world are currently using Bitcoin to store wealth, but this is a case-by-case basis.
- The BTC/USD market continues to consolidate, and after the recent surge toward the $30,000 level, there seems to be a little bit of hesitation.
- The $26,800 level is currently offering some support, and if it fails to hold, we could see Bitcoin drop down to $25,000. This level is significant as it is psychologically important and is likely to attract a lot of headlines.
- Any move below the $25,000 level would attract a lot of noise and make headlines.
The likeliest path for Bitcoin in the near term is choppy trading, as the $30,000 level has a lot of previous trading around it, which brings in a certain amount of “market memory” to the picture. The recent surge to the current level has been overdone, so going sideways would also help work off some of the froth. The Federal Reserve’s recent rate hike may have some effect on Bitcoin as well. If the US dollar strengthens, then it is likely that Bitcoin could struggle.
It’s worth noting that some parts of the world are currently using Bitcoin to store wealth, but this is a case-by-case basis. Ultimately, the healthiest thing for the Bitcoin market would be a short-term pullback, which would work off some of the excesses and balance out the impulsive move higher. A daily close above the $30,000 level would almost certainly send the market into a FOMO phase, bringing in more hot money. This is the typical play for Bitcoin, you go through phases of choppiness, followed by impulsive and radical moves.
In summary, the Bitcoin market is likely to continue its consolidation in the near term, with $26,800 providing support and $30,000 serving as resistance. A move below $25,000 would attract a lot of attention and noise, while a daily close above $30,000 could lead to a FOMO phase. The market may also be impacted by the strength of the US dollar, as well as the use of Bitcoin as a store of wealth in some parts of the world. A short-term pullback would be a healthy development for the market and looks to be the most likely of outcome based on the candlestick patterns of the last few days. After all, breaking below two hammers with that negative candlestick on Wednesday will put a certain amount of weight around the neck of Bitcoin.
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