Bitcoin – Bears in Control, with Bitcoin Cash Hard Fork Dust Yet to Settle

Bitcoin and the broader market are on the slide once more, with the day ahead looking a precarious as the bears target $4,000 levels.
Bob Mason

Bitcoin gained 0.58% on Sunday, reversing Saturday’s 0.48% fall, to end the day at $5,659.5, the minor gain through the weekend leaving Bitcoin down 12.23% for the week, Monday through Sunday.

Following some sizeable intraday moves earlier in the week that contributed to the week’s losses, Bitcoin moved within some tighter ranges at the end of the week, with the start of the day seeing Bitcoin fall from a morning high $5,688.4 to a late morning intraday low $5,620.9 before finding support.

An afternoon rally saw Bitcoin break through the first major resistance level at $5,670.3 and second major resistance level at $5,712.3 to strike a late intraday high $5,745.6 before hitting reverse.

The late reversal saw Bitcoin slide back through the day’s major resistance levels to $5,600 levels by the day’s end.

For the Bitcoin bulls, the failure to take a run at $6,000 levels will be a concern, particularly when considering the fact that there should have been greater market support from the divergence in hash rates in favor of Bitcoin Cash ABC on Sunday, reflected in Bitcoin Cash SV’s 22% slide on Sunday, which was in stark contrast to Bitcoin Cash ABC’s 15.01% rally.

The dust has certainly yet to settle from the BCH hard fork, with Sunday’s minor gains across the broader market, seemingly a pause in the continued sell-off, as investors consider the implications of the Bitcoin Cash hard fork and what influence mining cartels can have on other blockchains and crypto currencies that have consensus algorithms that fail to protect the blockchains from 51% attacks.

Bitcoin’s short comings are Bitcoin Cash’s failures in the last week, with many having expected Bitcoin to face the 51% attack and not Bitcoin Cash that had mapped out a twice yearly upgrade to position itself as the most viable alternative to fiat money.

The latest hard fork has not only wiped out the chances of Bitcoin Cash fighting to be an alternative to fiat currency, but has also raised questions over the ability of core developers of other blockchains to deliver necessary upgrades to compete against the rest of the crypto majors.

One thing that is certain is that, despite a relatively range bound Sunday, even Bitcoin has seen volatility re-emerge, with the latest hard fork also raising doubts on whether the SEC will be willing to approve any of the 9 Bitcoin ETF applications until the dust settles, the market stabilizes and there is a greater understanding of what possible impact there could be on institutional money should Bitcoin hard fork down the road.

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At the time of writing, Bitcoin was down 2.62% to $5,511.2, with Bitcoin joining the broader market in a mass sell-off that led Bitcoin down from a start of a day morning high $5,659.5 to a morning low $5,496.5 before steadying. The reversal saw Bitcoin fall through the day’s first major support level at $5,605.07 and second major support level at $5,550.63, while managing avoid calling on support at the third major support level at $5,425.93.

For the day ahead, a hold onto $5,500 levels through the morning could see Bitcoin recover some of the day’s losses, with a move back through the second major support level at $5,550.63 bringing $5,600 levels back into play, though we can expect plenty of resistance on any attempted rebound.

Failure to hold onto $5,500 levels could see Bitcoin slide through the morning low $5,496.5 to call on support at the third major support level at $5,425.93 before any recovery, sub-$5,400 levels unlikely to be in play on the day, while the Bitcoin bears will be eyeing sub-$5,000 levels with greater interest.

Across the broader market, the reversal has seen Bitcoin’s dominance rise to 53.2%, with the total cryptomarket cap falling to $180.48bn.

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