- Bitcoin surged early Monday on optimism about a potential U.S. government funding deal but quickly lost momentum, forming a shooting star.
- I see continued consolidation around $100,000, with $108,000 and $93,000 marking key breakout levels.
Bitcoin opened up Monday with a bang as traders celebrated more of a risk-on type of environment, with word getting out that there might be a potential U.S. government compromise to open up the government going forward. That being said, the market is also maybe a little bit ahead of itself, and it is worth noting that Bitcoin wasn’t falling because of the U.S. government.
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With that in the back of our minds, we have to keep in mind that the fact that we gave back so much of the gains to form a bit of a shooting star in Bitcoin is not a strong sign. It’s also worth noting that the $108,000 level features the 200-day EMA, and we couldn’t even get there. With the action being the way it is, it does suggest that we are going to continue to consolidate.
$100K is the Battleground
The real battle for me, at least, is going to be right around the $100,000 level. The $100,000 level is an area that’s been a major support level more than once. If we were to break down below there, then it’s possible that the market could go looking to the $93,000 level. If we turn around and break above the $108,000 level, then it opens up the possibility of a move to the $116,000 level. But I think you need to have a lot more risk appetite out there to get Bitcoin really moving.
It is worth noting that online, all I’m seeing suddenly is a lot of Bitcoin believers out there trying to steady the markets. Really, at this point, it’s a bit of a mess to determine what the actual sentiment on Bitcoin is. But the one thing that we can see is that it’s clear that it’s not going to be easy to turn this market back around and start ripping to the upside. I think the area right around the $100,000 level will continue to be very important.
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