The Bitcoin market has rallied a bit during the Monday session to show signs of a push to the upside, but we have also seen the market give up all of those gains to form a relatively negative candlestick. The shooting star for the candlestick on Monday suggests that we are going to struggle to go higher, but we also formed a hammer during the previous session that bounce from the 200 Day EMA. In other words, is very likely that we are going to go back and forth in this general vicinity to build up momentum.
Normally when you see candlesticks like this competing against each other, it suggests that we are about to get sideways action. The market continues to look as if it is trying to figure out its next move, but it must be said that recently we have seen more upward momentum than down, and the fact that we have bounced from the 200 Day EMA also is a good sign.
It is also worth noting that the 50 Day EMA is starting to curl higher, perhaps ready to reach the 200 Day EMA, perhaps forming the so-called “golden cross.” The market rally at this point would cause that indicator to kick off, which longer-term traders tend to pay attention to. The $50,000 level above is a large, round, psychologically significant figure that a lot of people will be paying attention to, and if we can break above the $50,000 level, then it is possible that the market should go towards the $55,000 level, perhaps even $60,000. We are trying to figure out what happens next, and that might cause a little bit of noisy behavior in the short term. Whether or not we can take off to the upside is a completely different question, but it certainly looks as if we are trying to make that happen.
Alternately, if we were to break down below the 50 Day EMA, then it is possible that we go looking to reach the $40,000 level underneath. That is an area of extreme support from what I can tell, so it does look like Bitcoin is trying to tilt to the upside, but that does not necessarily mean it needs to take off right away. Furthermore, it is better that we grind higher than shoot straight up in the air, as it allows more constructive behavior over the longer term.