As of writing this article, Bitcoin is trading just under 40k. It has failed 3 key points and now people are getting scared. With that said, is this just a quick spook before it gets back on track, or should people give Bitcoin more caution?
In the above chart, there are 3 key points BTC has failed. The first is the 200-Day moving average at 48k. After BTC could not clear the major moving average, it tested support from 45K. Unable to build up more steam, it then broke down and headed for the 50-DMA at 42k. Now, we need to watch for the 40k area to hold because, if it does not, 37k is the next best support level.
However, there is one problem with the 37k price area. In the past, the 37k price area has been used to spook active investors out of the crypto space. Therefore, if BTC cannot hold, be careful and watch for a quick price drop that reverses. Examples of this are circled in the above chart.
Though we don't recommend buying a falling knife, we do recommend watching for entries after large price spooks.
On another note, we can see that our recent downturn in price has killed momentum in our Real Motion indicator and the Leadership indicator. This only confirms we should be careful from the momentum side and watch for special entry points, as mentioned above.
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ETF Summary
- S&P 500 (SPY): Could not hold the 50-DMA at 441.
- Russell 2000 (IWM): 192 next to hold.
- Dow (DIA): 343 needs to hold.
- Nasdaq (QQQ): Watching to find support.
- KRE (Regional Banks): 66.85 to clear.
- SMH (Semiconductors): 237 support.
- IYT (Transportation): Needs to find support or get back over 243.
- IBB (Biotechnology): 128 support.
- XRT (Retail): Tested 77.40 the 50-DMA.
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
