BTC/USD

Bitcoin rallied during the trading session on Wednesday, gaining 8%. This was very impressive as we bounced hard from the $6000 level, an area that I have been paying significant attention to. However, one thing that you should keep in mind when looking at this chart is that it’s in the midst of a major meltdown in the emerging markets. This is the one thing that I do think that Bitcoin has going forward, smaller countries sometimes will use crypto to divest out of their own currencies.

So in a sense, the meltdown in Turkey and other currencies coming could help Bitcoin, but it is a case-by-case basis. For example, the Chinese yuan struggles to lift this market, mainly because the Chinese have such strict capital controls. The South African Rand could cause this as well, but that will be short-lived as it is a small economy. Turkey may have been part of the effect during the trading session on Wednesday.

Now that we are trading above the $6500 level, I do think that there is a little bit of room to run. However, I still think that until we break above the $8000 level, we are simply looking for a selling opportunity. At the $7000 level, I see a significant amount of supply, and would not hesitate to short. This allows for a tight stop loss, somewhere near the $7150 handle. I think that we are not out of the woods yet, because even though it’s an 8% gain, you should keep in mind that we are down roughly 65% from the highs. 8% from here means a lot less than 8% from say $19,000.

Because of this, I still believe in the “sell the rallies” mindset, but if we did turn around and break above the $8000 level, we would probably make a serious attempt to go towards $10,000 next, as it would be too big of a target to ignore.

(Click on image to enlarge)