How To Trade Bitcoin (BTC) From This Point Forward

How To Trade Bitcoin (BTC) From This Point Forward

The cryptocurrency market remains in a downtrend. It has now become increasingly clear that BTC/USD might end up testing at least $6,000 if not lower. The reason I say $6,000 is because it is a strong psychological support. When the price shot up past that level after it made a temporary bottom at $3,132 it was perceived as the beginning of a new bull run by the vast majority of traders in this market. Even though it does not appear to be as convincing as before to most of those traders, they are still counting on it to hold if and when the price does decline to that level. At the moment, BTC/USD is trading well below the 200 day moving average and it is in a strong bear trend. However, we need a break below $6,000 to see an aggressive decline. 

Most cryptocurrency traders are interested in how they should trade this because to a trader it should not make any difference whether the price is going up or going down as long as there is a trade to be made. The current outlook of BTC/USD near term appears to be mildly bullish with the potential of a rally towards the $7.4k level. It could get extended past that in case of another short squeeze if it ends up being similar to the one we saw earlier this week. On the 4H time frame, BTC/USD has already tested the 200 moving average and faced a rejection. It means that the price does not have to necessarily rise that high again. In any case, there is no reason to rush being bearish near term. If the price does decline below $7k again, it is very likely to do that after some sort of a sideways movement that will demonstrate enough weakness to indicate more clearly what could follow next.

The near term outlook of the EUR/USD forex has changed. Even though we can still expect short-lived bullishness in Bitcoin (BTC) and the rest of the cryptocurrency market, it is important to realize that the price of Bitcoin (BTC) follows the EUR/USD forex pair when it comes to larger well established trends. We may keep seeing out of sync movements short-term but if the EUR/USD forex pair continues to decline further Bitcoin (BTC) is not likely to hold its ground. 

Major investors in most emerging markets look at bigger markets to deduce what could happen next. In this market, most of those investors shape the direction of Bitcoin (BTC) and other cryptocurrencies. Being a very small market in comparison to the stock market or even other emerging markets, it is very easy to manipulate. To some this would be an excuse not to benefit from opportunities in this market but to others this could just be the reality they need to accept and devise strategies to stay under the radar and benefit from the moves of the market makers and whales. Even though BTC/USD is very likely to decline a lot more long-term it is important to be nimble enough to quickly respond to changing market developments near-term.

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