- The bitcoin market was negative during the trading session on Friday, as we continue to see a lot of noise just above, with the $120,000 level being a major barrier.
- This is a very obvious and large target for the market, and we did try to break above there during the previous week but gave back the gains to close just below that massive level.
- I think this puts a target on the back of the $120,000 range, and people will be watching that very closely.
Technical Analysis
The first thing that I would point out is that there is the possibility of a massive bullish flag that we are currently trading in, and it is worth noting that the candlestick on Friday did bounce from what would have been the bottom of that flag. If this were in fact to break out to the upside, and I would have that as a daily close above the $120,000 level, it would make a lot of sense for bitcoin to go racing toward the $130,000 level above. The measured move makes sense because Bitcoin loves moving in $10,000 increments.
On the other hand, if we were to break down from here, then we could test the 50 Day EMA, and then perhaps the $110,000 level, which was an area that has been previous resistance, so it should end up being support based on the idea of market memory coming back into play.
All things being equal, we are still very much in a significant uptrend, despite the fact that it has been very noisy. Keep in mind that it’s the middle of summer, and liquidity could drop, and a lot of traders are just not bothered by this from the institutional side. Most of them are out there showing the BlackRock ETF, so if there’s not a lot of action on Wall Street itself, that will have a detrimental effect on bitcoin. This isn’t to say that the market suddenly negative, but I do recognize that you need to be more of a “buy on the dips” type of trader in this environment.
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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.