The Bitcoin market was strong on Wednesday, as traders are perhaps out there looking to take advantage of “cheap Bitcoin.” This is a market that has been horrible, so value hunters are probably going to be attracted to this asset.
BITCOIN
The Bitcoin market has been very strong during the trading session on Wednesday, gaining over 7% and it certainly looks as if the buyers are coming in and trying to put some type of floor in this market. That being said, we continue to see a major resistance level above at the $72,000 level. If we could break above there, then I think it brings in a little bit of FOMO, opening up the possibility of an even bigger move to perhaps to the $84,000 level.
Short-term pullbacks I think continue to be potential buying opportunities, but keep in mind that the $60,000 level is going to be on a hard floor. At this juncture, the market has to hold onto the $60,000 level because quite frankly, if we were to drop below there, that could be a major problem for Bitcoin.
Potential for Upside Move
Keep in mind that Bitcoin has been lackluster, to say the least as of late and there is almost certainly an inordinate amount of damage done to a lot of accounts out there. So quite frankly, it wouldn't surprise me at all to see Bitcoin continue to struggle to hang onto significant gains, but given enough time, I do think that there's a world in which Bitcoin takes off to the upside.
We need some type of catalyst; that catalyst could be something as simple as technology in general doing better because the sell-off has been so brutal. I think you also will have to convince institutional traders that it's worth taking the risk of getting involved in something that has been lost so much in such a short amount of time. I'd be cautious here, but I am a little more optimistic after this move considering just how bad things had been previously.