As of writing this article, Bitcoin is trading just under 40000. 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 Bitcoin (BTC) has failed.
The first is the 200-Day moving average (DMA) at 48000. After BTC could not clear the major moving average, it tested support from 45000. Unable to build up more steam, BTC then broke down and headed for the 50-DMA at 42000.
Now we need to watch for the 40000 area to hold because if it does not, 37000 is the next best support level.
However, there is one problem with the 37000 price area. In the past, the 37000 price area has been used to spook active investors out of the crypto space.
Therefore, if Bitcoin 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.
Watch Mish’s most recent appearance on Cavuto: Coast to Coast.
Stock Market ETFs Trading Analysis & Summary:
S&P 500 (SPY) Could not hold the 50-DMA at 441.
Russell 2000 (IWM) 192 next to hold.
Dow Jones Industrials (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.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
