Bitcoin – Are We In For Another Tumble?Another range bound start to the day for Bitcoin as investors consider the SEC’s next Bitcoin ETF application decision. It could get choppy later…
Bitcoin continued to recover from Monday’s losses, rising by 0.97% off the back of Tuesday’s 1.31% gain to end the day at $6,395.7.
A particularly range bound morning and early afternoon saw Bitcoin steer clear of the day’s major support and resistance levels, a lack of direction through the first half of the day leading to a slide through the day’s first major support level at $6,246.73 and second major support level at $6,159.47 to a late evening intraday low $6,100 before finding support.
An almost immediate bounce back saw Bitcoin break though the day’s first major resistance level at $6,402.63 and second major resistance level at $6,471.27 to an intraday high $6,549.9 before pulling back to sub-$6,400 levels late in the day.
The choppy 2nd half of a day came off the back of mixed crypto news hitting the wires, with the negative news including reports of a Japanese cryptocurrency exchange being hacked and a UK Treasury Committee report concluding that Bitcoin and other cryptocurrencies are ill-suited for retail investors and are in dire need of regulation.
While the UK may not be of the largest crypto jurisdictions, the possibility of other jurisdictions considering the report content is a negative, particularly when considering the fact that the vast majority of cryptocurrency investors are high net worth individuals and retail investors, the existence of high net worth individuals in the market coming off the back of the ascendancy of Bitcoin and other cryptos.
On the positive side, news of Fidelity Investments looking to launch Bitcoin products by the end of the year was a positive, other reputable asset managers likely to follow suit, supporting capital inflows into the market.
With the sentiment skewed towards the negative, focus remains on the next SEC decision on a Bitcoin ETF application and the G20’s anticipated rollout of unified rules and regs that continue to drive volatility, which in itself could be construed as a negative for a market that is looking for institutional money to come pouring in, the SEC unlikely to approve products for institutional money until the year’s persistent volatility abates.
At the time of writing, Bitcoin was up 0.19% to $6,402.9 to buck the broader market trend, with Bitcoin moving through to an early morning $6,420 high before easing back to a morning low $6,382.2, the moves through the early part of the day leaving the major support and resistance levels untested.
For the day ahead, holding above $6,350 would provide support for another run at $6,500 levels later in the day, while we would expect the day’s first major resistance level at $6,597.07 to be out of reach on the day, barring particularly positive news hitting the wires, resistance at $6,500 having been particularly strong of late.
Failure to hold above $6,350 could see Bitcoin pullback through to $6,200 levels before any recovery, the day’s first major support level at $6,147.17 likely to be left untested barring negative news hitting the wires, which is a possibility as regulators begin to take a greater interest in the market and ongoing regulatory reviews of the broader market begin to reach their conclusions.