- Bitcoin has pulled back just a bit during the trading session on Wednesday as we continue to see a lot of noisy behavior.
- The market continues to look at the $106,000 level as a significant barrier, and I think at this point in time we are essentially trying and to work off some of the excess froth that we have seen in this market recently.
- After all, Bitcoin has rallied about 40% in the last month or so, which obviously is a big deal. Because of this, it’s not a huge surprise to see that we are still struggling on Wednesday, just as we did over the last 3 or 4 sessions.
Technical Analysis
The technical analysis for this BTC/USD market is bullish, but we have a significant ceiling above that will continue to cause issues. The $106,000 level is the beginning of resistance that traders would be well advised to pay close attention to, because we can break above there, then we start to chip away at the massive resistance that extends all the way to the crucial $110,000 level the $110,000 level being broken to the upside offers a “FOMO situation” where traders will be looking to jump into Bitcoin in order to take advantage of the momentum.
Even if we do pull back from here, I think there are plenty of support levels underneath that you need to pay close attention to, especially the $100,000 level, which is a large, round, psychologically significant figure that a lot of people will have to pay close attention to. This is an area that’s a massive region to pay close attention to because it has caused a bit of noise in the past. If we break down below there, then I will start to look toward the $96,000 level as the next potential floor in the market, especially as the 50 day EMA is starting to race toward it. I have no interest in shorting Bitcoin anytime soon.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.