Bitcoin Bulls Eye $7,000 and a Bearish Trend Reversal

Bitcoin sees red early off the back of Monday’s gains as the bulls look for $7,000 levels to support a near-term bullish trend reversal.
Bob Mason
Trading cryptocurrencies

Bitcoin gained 2.91% on Monday, following Sunday’s 0.52% loss, to end the day at $6,942.2, Bitcoin managing to bring to an end a sequence of 4 consecutive Monday losses.

A pullback to an early morning intraday low $6,652.7 steered clear of the first major support level at $6,573.87 supporting a move back through to $6,700 levels and a relatively range bound afternoon that left Bitcoin hovering at around the 23.6% FIB Retracement Level of $6,757.

Late in the day, a broad based cryptomarket rally saw Bitcoin break out from the 23.6% FIB Retracement Level of $6,757, with Bitcoin breaking through the first major resistance level at $6,805.87 and second major resistance level at $6,931.43 to strike an intraday high $6,942.2 before easing back to $6,902 by the day’s end.

The late rally saw Bitcoin hold above the first major resistance level and more importantly, the 23.6% FIB Retracement Level of $6,757 for the first time since 6th August, while resistance at $7,000 held Bitcoin back from more material gains on the day.

Supporting Bitcoin and the broader markets would have been the latest Bitcoin futures numbers from the U.S CFTC for the week ending 21st August, the latest report showing that short positions were on the decline, while long positions were on the rise, to provide the bulls with some much needed support. The balance remains firmly in favour of the bears however, in spite of last week’s shift, with short positions standing at 3,426 v long positions of 2,160.

Much will depend upon whether the SEC approves all or some of the Bitcoin ETFs from its current review of its latest series of rejections, though there will also be the G20 unified rules and regs to consider, which could be just what the SEC is waiting for that may ultimately lead to a rebalancing in favour of the bulls.

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At the time of writing, Bitcoin was down just 0.18% to $6,896.8, with a choppy start to the day seeing Bitcoin pullback from an early morning high $6,963 to a morning low $6,872 before steadying, the moves through the early morning leaving the day’s major support and resistance levels untested.

For the day ahead, a hold above $6,832.3 would support a move back through the morning high $6,963 to bring $7,000 levels and the day’s first major resistance level at $7,011.9 into play, with resistance at $7,000 likely to pin Bitcoin back from a break out to $7,100 levels, the Bitcoin Bulls eyeing the 38.2% FIB Retracement Level of $7,376.

Failure to hold above $6,832.3 could see Bitcoin take a bigger hit later in the day, with sub-$6,800 levels and the day’s first major support level at $6,722.4 in play, though the news wires will need to deliver a blow to the Bitcoin bulls for Bitcoin to fall through to $6,700 levels, the beginnings of a near-term bullish trend forming off the back of Monday’s breakout from the 23.6% FIB Retracement Level of $6,757.

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