Bitcoin to Test Major Resistance

By January 13, 2020 Bitcoin Business
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  • Bitcoin trying to break out
  • Bitcoin testing 200 day EMA
  • Bitcoin testing downtrend line

Bitcoin continues to attract a lot of attention considering that the market has broken down significantly. The Bitcoin market has been all over the place during the last year or so, and as a result it has offered a lot of volatility for short-term traders. However, Bitcoin also tends to go silent for long ranges as well, so with that in mind it’s a matter of timing the market in order to make profits.

Technical Analysis

BTC/USD chart

The Bitcoin market against the US dollar has gone back and forth during the last couple of days, as it is hanging around the 200 day EMA. The 200 day EMA is obviously a significant technical indicator that people pay attention to, so there will be a lot of volatility on short-term charts. However, if one is to play this market it is paramount that the longer-term trend be taken into account. With that in mind, the 200 day EMA continues to cause a lot of issues.

the US dollar has been hit rather hard against certain currencies, yet Bitcoin sits still

The downtrend line will continue to influence trading as well, so that is something that needs to be paid attention to. In other words, the market needs to clear the $8500 level before it shows a significant amount of momentum to entice buyers of any significant timeframe. Because of this, signs of exhaustion will probably continue to be jumped on by short sellers. That being said, break down below the 50 day EMA, which is colored in red on the attached chart, would open up fresh selling and show further weakness.

What is truly interesting is that the US dollar has been hit rather hard against certain currencies, yet Bitcoin sits still. Bitcoin has been shunned for some time and even though there is the halving in May, it seems as if there is a serious lack of interest or demand. This of course is also due to the fact that Bitcoin simply has not been adopted with any serious influence. In some Third World countries it is in use, but as far as acting like money, it’s far too volatile to do so.

Bitcoin has become a speculative market at best, and it seems that every time that it gets a nice bounce, those who own large amounts of the digital currency are more than willing to jump it off on people chasing price.

There is the argument that that it is still “early days” when it comes to Bitcoin, but one of the biggest issues that traders have is that the story behind Bitcoin continues to change. It was once digital gold, then it was “new money.” After that, it became a play on blockchain technology, but there is no significant use for block chain technology a decade later. While it shows promise, it hasn’t been adopted on a large scale. Furthermore, the very fact that it is backed by nothing, is a bit ironic considering that is the biggest complaint about fiat currencies.

Proprietary trader of currencies and futures, Chris has been a financial markets writer since 2008 and has helped traders globally in his role as educator. Father of two Chris enjoys baseball and building trading strategies.

Bitcoin testing 200 day EMA

Bitcoin testing downtrend line Bitcoin continues to attract a lot of attention considering that the market […]

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