Bitcoin – Bulls Holding on After Delivering a pre-Weekend Rally

Bitcoin gained 4.06% on Friday, following on from Thursday’s 0.71% rise, to end the day at $6,571.2.

The moves through the day left Bitcoin up 4.08% for the week, Monday through Friday, with Friday’s broad based cryptomarket rally seeing Bitcoin trail a number of the majors on the day.

A day long rally saw Bitcoin break through the first major resistance level at $6,456.83 to test the day’s second major resistance level at $6,598.67 with a late in the day intraday high $6,592.9 before easing back.

In spite of 3 consecutive days of gains, Bitcoin continued to fall short of the 23.6% FIB Retracement Level of $6,757 and $7,000 levels to leave the extended bearish trend firmly intact, though the prospects of a near-term bullish trend formation has improved with the recent gains taking Bitcoin into positive territory for the current week.

There was no significant news hitting the wires to drive the broad based market rally, with investor reaction to the SEC’s decision to postpone decisions on a number of Bitcoin ETFs likely to have been overdone.

No news is good news for the cryptomarket and the lack of regulatory noise from the South Korean government, who has been looking to move ahead following the delay to the G20 unified rules and regs, has provided much needed support.

The end of week rally also saw Bitcoin’s dominance ease back from a week high 54.56% to 50.8% at the time of writing, with Friday’s double digit gains made by Bitcoin Cash, Litecoin, Ripple’s XRP and a number of other majors eating into Bitcoin’s slice of the pie.

Bitcoin’s dominance tends to reflect general market sentiment, with sub-50% levels tending to signal bullish cryptomarket sentiment, Bitcoin tending to see more modest gains and losses that contribute to the shifts in dominance that can be considered a bellwether for the broader cryptomarket.

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At the time of writing, Bitcoin was down 1.14% to $6,508.8, with Bitcoin pulling back from a start of a day $6,619.5 high that came up short of the first major resistance level at $6,679.4.

A slide to a morning low $6,456.3 saw Bitcoin hold above the first major support level at $6,376.5, before recovering to $6,500 levels, which will be a key level through the day.

For the day ahead, holding above $6,485 through the morning would support a recovery later in the day, with a move back through to $6,600 levels likely to bring the first major resistance level at $6,679.4 into play, while we would expect Bitcoin to face plenty of resistance in any attempt at a break through to $6,700 levels in the event of a rebound.

Failure to hold above $6,485 through the morning could see Bitcoin take a bigger hit later in the day to bring the first major support level at $6,376.5 into play, with any pullback to sub-$6,400 levels likely to leave a break back through to $6,600 levels off the table for the day.

For the Bitcoin bulls, the good news will be that the morning reversal is as a result of some profit taking rather than a shift in sentiment, which should support a recovery, though much will depend upon how much money comes off the table through the morning, a shift in momentum never a good thing for Bitcoin and the broader market.

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