Bitcoin – Bulls Manage to Hold on as Vol Creeps Back inBitcoin bounces back to ease near-term fears of a slide to sub-$3,000 levels, strong support evidenced by Tuesday’s moves.
Bitcoin rose by 1.67% on Tuesday, following a 0.19% fall on Monday, to end the day at $3,639.1.
Off the back of a particularly range bound start to the week, which continued through the early hours of Tuesday, Bitcoin tumbled to a late morning intraday low $3,462. The sell-off saw Bitcoin slide through the first major support level at $3,545.10 and second major support level at $3,501.8 before recovering.
It was Bitcoin’s first visit to sub-$3,500 levels since 17th December and signalled, not only a pickup in cryptomarket volatility, but also a strong level of support for Bitcoin and the broader market, in spite of the return to tight ranges at the start of the year.
The Tuesday morning sell-off saw the total crypto market cap fall to $117.69bn before recovering to $120bn levels, with EOS and Tron’s TRX leading the rebound on Tuesday. EOS bounced back to end the day with a 5.27% gain, with Tron’s TRX enjoying a 2nd solid day, up 4.04% off the back of a 7.9% rally on Monday.
There was little coming from the news wires to deliver the late morning blow to Bitcoin and the broader market, with talk of Bitcoin being oversold at $3,500 levels contributing to the late morning bounce back.
While Tron’s TRX continues to buck the trend across the broader market, trailblazing its way through January, currently up 86%, the broader market looks to have reverted back to trend, a lack of differentiation across the cryptos creeping back into the market.
This could well shift once the Ethereum upgrade takes place in February. When considering a particularly weak start to the year for Ripple’s XRP, down 10.33%, some of the cryptos are certainly due for a bounce back, particularly when considering the successes that certain platforms have had over the last 12-18 months.
At the time of writing, Bitcoin was up 0.32% to $3,650.9, with moves through the early hours seeing Bitcoin fall from a morning high $3,661.1 to a morning low $3,631 .0 before recovering. Another range bound start to the day left the major support and resistance levels untested early on.
For the day ahead, a hold onto $3,600 levels would be needed to support a run at Tuesday’s high $3,682.1 to bring $3,700 levels and the first major resistance level at $3,726.8 into play before any pullback. Having failed to strike $3,700 levels for two consecutive days, support from the broader market would be needed for a break out from $3,600 levels later in the day.
Failure to hold onto $3,600 levels could see Bitcoin call on support at the first major support level at $3,506.7 before recovering, sub-$3,500 levels unlikely to be tested, barring a meltdown event later in the day.
For the crypto bulls, recovering to $3,600 levels on Tuesday was not just a positive for Bitcoin, but the broader market, with Bitcoin likely to take the rest of the majors with it if sub-$3,000 levels were hit.
Volatility appears to be back and we can expect some more choppiness today should the recent trend in volumes across the broader market continue.