Crypto Market Outlook: Tough Times Ahead

It has been a tumultuous start to the year for crypto markets to say the least. With Bitcoin falling as much as 30% since and beginning and Ethereum nearly 40%, it is ever so important to once again assess the current landscape of the volatile markets that are digital assets.

Within my most recent crypto market update in early January I flagged $40k as a must hold and buyable area. Unfortunately, we saw the price action take as swiftly below this level in late January despite its importance; such was the power of the latest impulse move downward. Whilst we didn’t see a flush all the way down to the $30k area which I had marked as the next buyable level from a technical perspective, we did see a brief low of $33k followed by a rally back to the underside of the $40k-$42k level this past week.

It is difficult to view this recent rally as anything more than a relief rally or bear market bounce amid a downtrend. Given the importance of this $40k-$42k level, I suspect any attempted breakout to fail and be met with heavy selling. As such, now appears an opportune time to hedge ones exposure. Personally, I still view $30k as a likelihood, and selfishly, would love to see it reached purely as an excellent entry point to buy. Unless we break above $40k and retake the 50-day moving average, this remains my base case.