- Bitcoin struggled near $92,500 after an early rally, with recent weakness suggesting fading momentum.
- The market’s choppy behavior hints at a possible bottoming process, though major levels at $80,000 and $93,000 remain critical for directional conviction.
Bitcoin initially rallied during the trading session on Thursday, but has run into a little bit of a problem near the $92,500 level. By pulling back the way we have, it certainly looks as if we are running out of momentum. This is an area that shows quite a bit of noise, and therefore, I think it doesn’t really surprise me to see sellers coming back into the market. At this point in time, the Bitcoin market has been extraordinarily negative. And although we’ve seen a nice bounce from the $80,000 level over the last couple of days, we don’t really have the momentum quite yet to send the market higher.
I think a short-term hold back at this point in time makes quite a bit of sense, as maybe we’re trying to form a bottoming pattern. And I do believe that’s the most bullish outcome for Bitcoin in the short term.
Market Structure and Institutional Behavior
Markets don’t fall as they did and then turn around and bounce without some type of massive external factor. That’s not what institutions want to see. And you have to keep in mind that Bitcoin is now run by the institutions. Long gone are the days of 20% gains. And quite frankly, at this price, that would be horrific. You would have all kinds of problems with liquidity and people bailing and taking profit right away, or people who are sitting on massive losses getting out when the losses suddenly become more palatable. I just think it would cause chaos.
A little bit of back-and-forth action in this area makes a lot of sense to me. And I think that’s actually a good thing. Maybe, just maybe, we’ll find ourselves in an accumulation pattern based on Dow theory. Just have to wait and see. If we were to turn around and fall below $80,000, that would be horrific for Bitcoin. Breaking above $93,000 is a bullish sign, but we don’t want to do it too rapidly. We want to build pressure slowly.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
