Bitcoin is showing signs off life as it now has given itself some short distance of breathing room above the $20,000 level. BTC/USD currently is trading at $21,500.
Naturally Bitcoin ‘longs’ are curious if this is the beginning of a bigger rally that can help them recoup steep losses after Bitcoin really started plunging after failing to hold above the $40,000 several weeks ago.
While it is fair to say that Bitcoin remains oversold on the short term charts, the overall trend right now is still downward and fairly steeply downward at that.
Expecting a reversal higher in which BTC/USD is able to reclaim the $30,000 is asking a bit much of the cryptocurrency, especially in the risk-off environment we find ourselves in. If Bitcoin can manage to retrace into the $24,000 – $25,000 range, this should be viewed as an opportunity to lock in any near term profits on the long side to help soften the blow of the big drop we had in recent weeks.
To hold onto a long position in the hope of a bigger move higher could result in more misfortune because the next move downward could come fast and furious and take BTC/USD downward and closer to the $15,000 level in the medium term.