Bitcoin Has Quiet Good Friday

In the short term, I suspect that Bitcoin is going to continue to go back and forth, as we are trying to figure out where to go next.

Bitcoin did very little on Friday as liquidity was very thin during the Good Friday holiday. The $40,000 level is an area that attracts a lot of attention, and it makes quite a bit of sense. The last couple of days have been very sideways and noncommittal, so I think that tells you that we just do not have any directionality in the short term.

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You should pay close attention to the fact that the most recent large bar was negative, slamming into the $40,000 level. It is very possible that we may break down from here and test the 37,500 level, which is an area where we had seen support previously. Breaking below that level could open up even more selling to reach the $35,000 level.

If we were to turn around and take out the 50-day EMA, it is possible that we could go looking toward the $45,000 level, an area that was previous resistance. Breaking above that then opens up the possibility of a move to the $50,000 level. At this point, the biggest problem with Bitcoin is that the risk appetite of traders around the world has been tested, and at this point, it is likely that until things change drastically, it is going to be difficult for this market to take off to the upside.

Keep in mind that crypto is far out on the risk spectrum, and therefore we need to see a lot of risk appetite out there for Bitcoin to take off. You will probably see a move in the stock market before you see Bitcoin. Furthermore, there has been a strong correlation between the NASDAQ 100 and Bitcoin for some time, so pay close attention to the technology sector and high growth stocks. You can use that as a bit of a secondary indicator, perhaps even a tertiary indicator.

In the short term, I suspect that Bitcoin is going to continue to go back and forth, as we are trying to figure out where to go next. Ultimately, this is a market that I think is going to be quiet, but the longer we go sideways, the more likely we are going to see a bit of momentum building going forward in this market.