- The bitcoin market has a bit of bent stomach churning during the trading session on Wednesday as we have seen a little bit of a pullback early, only to turn around and skyrocket toward the $85 level.
- This was mainly in reaction to the cooler than anticipated CPI numbers, as traders suddenly thought the Federal Reserve was going to be cutting rates quickly.
- However, reality set in as the reality of inflation still being part of the US landscape become apparent. Even if the Federal Reserve does cut rates sometime this year, it could be a very short cycle.
This will be interesting to watch, because Bitcoin was built on the idea of the United States having lower rates in perpetuity. Most Bitcoin traders have no idea how to trade a market that is watching rates rise, and for that matter, I would suggest that most Bitcoin traders have no idea there is an interest rate market. This is where retail traders find trouble, when it becomes a little bit more of a complex game other than just simply “HODLing.”
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Dollar Cost Averaging
However, there is something to be said for those who simply hold on for dear life. After all, Bitcoin has rallied in the past, but the catch is you cannot be trying to trade it for short-term moves, looking at it as an investment. You of course have to ignore the fact that it’s not being used for anything at the moment, but it seems like there’s a lot of money on Wall Street willing to pump into this ETF, which of course is exactly what Bitcoin has become.
From a technical analysis standpoint, the Bitcoin market is hanging on by a thread, but I would also point out that the $75,000 level should be somewhat supported, as that area was significant resistance previously. As long as we can stay above there, I’m comfortable buying little dips, and building a bigger position. In fact, that’s what I’ve been doing despite the fact that I’m not necessarily a true believer. I’m fine with making money on a market that may or may not be a real thing in the real world.
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