- Bitcoin continues to struggle during the trading session on Thursday, as the $92,500 level has acted as a major barrier.
- All things being equal, this is a market that is falling apart, so it is worth watching how price behaves in this area.
- The $92,500 level is an area that many had marked as potential support, but it looks as though it might be flipping to resistance.
Now we will have to wait and see whether or not that ends up being the case, because there were two days in a row that formed hammers, but the action on Thursday is poor. It has been interesting to watch this, and perhaps more importantly, how people behave. There seems to be speculation that there is a certain amount of manipulation, but the manipulation is probably to the upside in this market most of the time, not the downside.
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Institutions are Leaving
Large institutions are bailing out on crypto and Bitcoin at the moment. This is mainly because they are institutions; they are trying to make money. It is not a religion for them. When Bitcoin drops 20 or 30%, they leave the space just like any other money manager would do. You would anticipate that if you put your money in a retirement account, the person running it would not sit on 50% losses, which is something Bitcoin can easily do.
At this point, it looks very likely that price will go lower from here, although it is at least trying to put up a fight. There is a very real scenario suggesting a drop to the $84,000 level, possibly even the $80,000 level. While Bitcoin is not necessarily going to zero, and it is not necessarily going to be nonviable again, the reality is that as traders expect central banks around the world to cut rates, that is not floating Bitcoin anymore. It is almost as if it is trying to figure out the next reason for it to be important.
Throughout the years, Bitcoin has changed its colors: at one point it was money, at another it was a security, then digital gold, then a store of wealth, then the new world’s reserve currency. Recently, it has returned to being viewed as a store of wealth. Really, what it is now is an ETF. It is an ETF acting as a risk barometer with high tech at the moment, as Wall Street has its ETF. BlackRock has reportedly been dumping massive amounts of spot Bitcoin. That story makes sense; if their clients want to get out of the ETF, that is exactly what they must do.
With that being said, the market appears extended. There could be a bit of a bounce, but it is not until Bitcoin gets back above the $100,000 level that any rally can be taken seriously.
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