Bitcoin Testing the Crucial $20,000 Level

If you are a longer-term trader, then you can buy little bits and pieces, but a short-term trader has to be looking to the downside, and the downside only.

The Bitcoin market has fallen during the trading session on Thursday as it looks like we are ready to test the $20,000 level again. This is an area that is a large, round, psychologically significant figure, and therefore if we were to break down below the $20,000 level, I think it opens up a rush of new selling. The previous session formed a hammer, so if we were to break down below it, that would also signify rather negative pressure.

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On the other hand, if we were to rally from here it’s likely that we will see significant selling pressure above. The market breaking above the $24,000 level might kick off a bit of a relief rally, but that is all that it will end up being. Ultimately, this is a market that I think will have plenty of sellers above as the people that jumped in during the previous consolidation area will be willing to get out as close to “break-even” as they possibly can. Crypto is almost dead at this point. Don’t get me wrong, there is a significant amount of interest in the crypto markets going forward, but there are a lot of them that are going to zero.

Over the next several months, if not several years, I anticipate the crypto is going to underperform. This makes sense as we have seen so many ridiculous “meme coins” attract a lot of attention over the last two years. We’ve also seen a lot of fraud, and therefore the entire industry is looking suspicious to most traders at this point. However, this is a lot like the technology selloff in 1999, there will be a handful of winners that go on for decades. After all, there was a point where Google and Amazon both got absolutely crushed along with the rest of the .com stocks. This is essentially where we are at right now, so you need to pay attention to the big coins. At this point, the only thing that is likely is that Bitcoin and Ethereum should continue to have a use case scenario, so starting with these two markets would be the first way to recover. If you are a longer-term trader, then you can buy little bits and pieces, but a short-term trader has to be looking to the downside, and the downside only.