Bitcoin – Bulls Cling to $3,900, But there Could Be Pain AheadBitcoin holds onto $3,900 levels and modest gains early on. Failing to take a run at $4,000 levels could inflict some damage later in the day, however.
Bitcoin fell by 0.63% on Tuesday. Partially reversing a 2.36% gain from Monday, Bitcoin ended the day at $3,896.8.
A relatively bullish start to the day saw Bitcoin rise to an early morning intraday high $3,934.1 before hitting reverse. Falling short of the first major resistance level at $3,982 and, more importantly, $4,000 levels, Bitcoin fell to an early morning intraday low $3,862.8.
Holding above the first major support level at $3,845.7, Bitcoin recovered to an early afternoon $3,925 before easing back to $3,800 levels.
Across the top 10 cryptos, it was a sea of red on Tuesday. Following Sunday’s bear trap, it’s been a choppy start to the week. A mixed bag on Monday and red across the board on Tuesday delivered mixed results for the majors for the current week.
Leading the way through the early part of the week was Ripple’s XRP, which was up by 6.52% by the end of Tuesday. The gains coming off the back of a 10.34% rally on Monday, attributed to an exchange listing.
Elsewhere, Ethereum was up by 2.96%, Monday through Tuesday, with Tron’s TRX close behind, up by 2.85%.
In reverse were Binance and EOS. Binance was down 5.07%, with EOS down by 2.85%, the only cryptos in the red for the current week. Some profit taking will have contributed to the EOS pullback, while Binance has struggled with 4 consecutive days in the red.
The reversal could see Bitcoin Cash SV move back into the number 10 spot, a trend-bucking 21.7% rally on Tuesday narrowing the market cap gap.
The pullback in Binance was attributed to larger than normal transactions being reported. The losses have come in spite of an explanation for a wallet transfer by Binance’s CEO. Negative sentiment across the broader market and trust issues in the crypto world likely limited the support from the statement.
At the time of writing, Bitcoin was up by 0.19% to $3,904.1. Recovering from an early morning low $3,878.9, Bitcoin rose to a morning high $3,910.0 before easing back. Moves through the early hours left the major support and resistance levels untested.
For the day ahead
A hold onto $3,900 levels through the morning would support a run at the first major resistance level at $3,933. While we would expect Bitcoin to come up short of $4,000 levels, the second major resistance level at $3,969.20 could come into play later in the day.
Sentiment across the broader market would need to materially improve for Bitcoin to eye $4,000 levels ahead of the weekend.
Failure to hold onto $3,900 levels could see Bitcoin slide through the morning low $3,878.9. A pullback would see Bitcoin call on support at the first major support level at $3,861.7. Support at the second major support level at $3,826.6 could come into play before any recovery.
Barring a broad-based crypto sell-off, we would expect Bitcoin to steer clear of sub-$3,800 support levels on the day.