I think you need to look at this through the prism of buying dips as an investment.
The 50-day EMA sits just below the $22,000 level and could offer a bit of dynamic support. If we were to break it down below there, then it’s obvious that it would be a negative turn of events. Breaking down below all of that opens up the possibility of a move down to the $20,000 level. The $20,000 level is a large, round, psychologically significant figure that a lot of people will pay close attention to and breaking down below that could really open up the floodgates.
The alternate scenario of course is that we break above the $25,000 level, perhaps reaching the $28,000 level. The $28,000 level extends to the $32,000 level and should be a massive resistance barrier. If we can clear all of that, then it would obviously be a change of trend, and at that point, I think that Bitcoin could go much higher. If we were to see Bitcoin break above there, we would probably start to see some of the smaller markets react and rally as well.
A lot of this will come down to the US dollar, which is starting to try to strengthen itself again. A lot of people are banking on the Federal Reserve loosening monetary policy, and therefore boosting risk appetite. If the Federal Reserve starts to get tight again, that could have people running away from Bitcoin as well. Either way, I think you need to look at this through the prism of buying dips as an investment, but if you are a shorter-term trader, you should probably continue to go back and forth and try to build up a sizable account through a range bound system that is focused more on a lower timeframe going forward.
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