- Bitcoin slid again on Tuesday as volatility persists and sentiment remains fragile.
- The $80,000 level stands out as a critical support zone, with structural pressures and institutional trading behavior limiting upside potential in the near term.
Bitcoin fell during trading on Tuesday as we continue to see a lot of volatility in the marketplace. After all, Bitcoin had been riding high as recently as the beginning of October, but it's been a pretty straightforward move to the downside since then. Quite frankly, Bitcoin seems as if there's just nothing holding it up at the moment, although it's worth noting that the middle of last week saw a massive hammer form right at the $80,000 level. And it also had quite a bit of volume. So that is at least something to hang your hat on. But this also shows just how important the $80,000 level may be. If we were to break down below there, it could really unravel the market at this point.
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Structural Pressures and Institutional Behavior
I do think Bitcoin has a lot of major structural issues at the moment, not the least of which would be the fact that it's an institutional asset now. So, what that means is that institutions will treat it like any other asset, not wanting 10% moves in a single day. That's just not how professionals trade. Unfortunately, retail traders in the Bitcoin marketplace are starting to learn a real lesson in fundamentals and money management. For far too long, Bitcoin has been boosted by the YOLO attitude of retail traders, but when there's millions of dollars on the line and professionals are out there moving a market, it's a totally different world.
I keep seeing a lot of noise out there about the manipulation of price to the downside, but quite frankly, I've never really seen anybody complain about the manipulation to the upside. So, with that being said, the market is I think going through a lot of growing pains. And at this point, I think you still have to look at any rally with suspicion. Again, if we break down below the $80,000 level, that would be extraordinarily negative, but I also recognize that we could just hang out in this area and try to form some type of basing pattern. Either way, this is not a market that I think has an easy path higher, at least not in the short term.
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