It is very likely that the Bitcoin market drops down to the $10,000 level where I would expect to see a lot of support.
The Bitcoin market initially tried to rally during the trading session on Wednesday, but as you can see the $11,000 level continues to cause a lot of headaches for buyers. Furthermore, the market has been trading in a $1000 range for a minute now, and with the $10,000 level underneath offering significant support. As we are bouncing around in this area, it becomes more of a short-term trading type of environment. I believe based upon the daily candlestick; we are simply not ready to take off to the upside quite yet.
What is very interesting is that the US dollar got hammered during the trading session, but Bitcoin did not seem to take advantage of it. For what it is worth, neither did gold or silver, at least not the way they typically do. In other words, there may be something bigger going on under the surface. I believe at this point it is very likely that the Bitcoin market drops down to the $10,000 level where I would expect to see a lot of support. Breaking through their opens up the possibility of a move down towards the 200 day EMA, which is closer to the $9500 level. After that, the $9000 level would be targeted. That is an area where we have seen a lot of support at previously, so it would make sense that there would be a bit of a fight there.
Looking at the chart, I believe that we will probably stay in this $1000 range overall, but I am aware of the fact that if we turn around and break out to the upside and above the $11,000 level, it could have this market looking towards the $12,000 level which was the most recent high. We have seen a ton of selling in that area, so I do not think we are going to simply be able to slice through that area unless something drastic happens. I anticipate that the most likely of scenarios is that we simply drift lower from here, reaching down towards the $10,000 level where we will have to make a bigger decision for a longer-term move. If you have the ability to trade small bits and pieces on short-term charts, you may be able to use this range as a nice trading environment, otherwise, you could wait for lower prices to buy at a better-discounted price.