Bitcoin – Back in the Red. Holding onto $4,000 will be Key
Bitcoin gained 2.12% on Saturday. Following on from a 1.38% rise on Friday, Bitcoin ended the day at $4,088.0.
A bullish start to the day saw Bitcoin rally to an early morning intraday high $4,166.8 before easing back. The early move saw Bitcoin break through the day’s major resistance levels before easing back to sub-$4,100 levels. Bitcoin pulled back through the third major resistance level at $4,112.73 to a relatively range-bound afternoon.
For the bulls, a hold above the second major resistance level at $4,050.13 was key. Of greater significance would have been a second consecutive hold onto $4,000 levels. Looking back at the moves since the beginning of the year, Bitcoin has only managed to hold onto $4,000 levels beyond a 2nd consecutive day on two occasions. On both occasions, the hold stretched to a 4th consecutive day before Bitcoin hit reverse.
A breakout to $4,500 levels would likely give the Bitcoin bulls a more extended run. Bitcoin last sat at $4,500 levels back in late November of last year, which was in the midst of a sell-off from $6,000 levels.
For the current week, Bitcoin was up by just 2.24%, with tight ranges in the earlier part of the week capping Bitcoin’s gains.
Across the top 10 cryptos, it was a sea of green on Saturday. Leading the way on the day was Bitcoin Cash ABC, which gained 8.27% and Binance, up 6.96%.
Bringing up the rear was Ripple’s XRP, which rose by just 1.33% and Tron’s TRX, which gained 1.23%.
Binance was up by 10.96%, Monday through Saturday, while Stellar’s Lumen was up by 7.55%. It’s been a good run for Stellar’s Lumen this month. A logo alone, however, is not expected to support an extended run.
Leading the way for the current week was Bitcoin Cash ABC, which surged by 18.2%. A 2nd consecutive day of 8% plus gains on Saturday led Bitcoin Cash ABC to levels not seen since a brief visit in late February.
The broad-based crypto rally saw the market cap rise to a high $141.47bn on Saturday before easing to $139.98bn at the time of writing.
While there were no major news events to support the latest rally, a jump in volumes supported the upward momentum. Crypto trading volumes hit 35bn levels on Saturday. Earlier in the year, volumes were at as low as 14bn levels. The bullish sentiment was reflected in Bitcoin’s dominance levels, which was down at sub-51% levels.
At the time of writing, Bitcoin was down by 1.03% to $4,046.1. Bearish through the early hours, Bitcoin fell from a morning high $4,089.8 to a low $4,041 before steadying. In spite of the pullback, Bitcoin held above the first major support level at $4,005.13.
For the day ahead
A move back through to $4,085 levels would support a recovery of the morning losses and a return to $4,100 levels. Support from the broader market would bring the first major resistance level at $4,168.83 into play. We would expect Bitcoin to face plenty of resistance on any run through to $4,100 levels on the day. In the event of a breakout, the bulls will be eyeing a move through to $4,200 levels.
Failure to move back through to $4,085 could see Bitcoin give up more of the week’s gains. A fall through the morning low $4,041 would bring the first major support level at $4,005.13 into play. A sustained sell-off through the day and Bitcoin could be back at sub-$4,000 by the day’s end. In the event of a sell-off, we would expect the second major support level at $3,922.27 to be left untested.