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Bitcoin – A Steady Morning After, But Will It Be Enough to Draw in the Bulls

By:
Bob Mason
Published: Feb 7, 2019, 04:19 UTC

Bitcoin in tight ranges once more and it could spell trouble if Bitcoin fails to take a run at $3,500 levels.

Bitcoin Bruised

Bitcoin fell by 1.74% on Wednesday. Reversing a 0.64% rise from Tuesday, Bitcoin ended the day at $3,451.9.

A particularly bearish start to the day saw Bitcoin tumble from an intraday high $3,521 to a morning low $3,434.3 before finding support.

The sell-off saw Bitcoin slide through the first major support level at $3,486.23 and second major support level at $3,459.47.

A partial recovery to an afternoon high $3,463.8 saw Bitcoin break back through the second major support level before hitting reverse again. Bitcoin fell through the second major support level at $3,459.47 and third major support level at $3,417.07 to a late afternoon intraday low $3,405.3.

For the bulls, the only good news from the day was a move back through the third major support level to $3,500 levels by the day’s end. The pullback will be of little consolation, however, with Bitcoin seeing sub-$3,500 support wane through the middle of the week.

Elsewhere

From the top 10 cryptos, Bitcoin Cash SV managed to buck the trend on the day, with a 2.75% gain. A first day in the green in 4 days will provide some hope of a recovery of the current year’s losses.

There’s a long way to go, however, with Bitcoin Cash SV down 26.6% year-to-date and the bearish sentiment continues to be a drag on the broader market.

For the rest of the majors, the bears were in full control. Litecoin saw the heaviest losses on the day, sliding by 4.36%, with Stellar’s Lumen close behind, sliding by 4.29%.

The broad-based crypto sell-off in the early hours of Wednesday morning saw the total crypto market cap fall from $113.45bn to $110.97bn before recovering to $111.6bn at the time of writing.

Wednesday’s reversal came in spite of the news wires being on the quieter side ahead of the early sell-off. Expectations were for bigger losses to hit the majors through the day, which didn’t materialize, but certainly remains a possibility ahead of the weekend.

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At the time of writing, Bitcoin was flat at $3,452.0. In a particularly range bound start to the day, Bitcoin’s morning low $3,447.9 and high $3,453.7 left the day’s major support and resistance levels untested.

For the Bitcoin bulls, a recovery from the morning low will have eased any immediate fears of a return to sub-$3,400 levels ahead of the weekend.

BTC/USD 07/02/19 Daily Chart

For the day ahead

Bitcoin would need to move through the morning high to $3,460 levels to bring $3,500 levels back into play. A move through to $3,500 levels would bring the first major resistance level at $3,513.5 into focus before any pullback.

We would expect Bitcoin to come up short of the second major resistance level at $3,575.1, however, with Bitcoin having failed to break out from $3,520 levels over the last 3-days.

Failure to move through to $3,460 levels could see Bitcoin move within relatively tight ranges through the day. A pullback through the morning low 3,447.9 could see Bitcoin slide back to sub-$3,410 levels before any recovery. Barring a broad-based crypto sell-off, we would expect Bitcoin to steer clear of sub-$3,400 levels and the first major support level at $3,397.80 on the day.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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