Bitcoin – Bulls Try to Steady the Ship As Volatility Returns

It’s a positive start to the day for Bitcoin and the broader market, but the bulls are going to need more than minor gains through the morning.
Bob Mason
bitcoin eth

Bitcoin slumped by 5.67% on Thursday, following on from Wednesday’s 0.52% decline, to end the day at $6,254.1.

A particularly bearish start to the day saw Bitcoin slide from a start of a day intraday high $6,630.1 to a morning low $6,252 before steadying through the remainder of the morning, the early sell-off seeing Bitcoin tumble through the day’s major support levels, with the day’s high falling well short of the first major resistance level at $6,689.63.

Cryptomarket conditions failed to improve through the afternoon, with Bitcoin falling to a late in the day intraday low $6,220.4, with attempts at a recovery through afternoon being cut short, an afternoon high $6,336 being as good as it got for the Bitcoin bulls.

The mass sell-off across the broader market, with some of the majors coughing up as much as 17% on the day, saw Bitcoin’s dominance bounce back to 54.7%, while the total cryptomarket cap slumped to sub-$200bn levels for the first time since 20th September.

What caused the damage to the broader market, the sell-off coinciding with a global equity market rout that saw an impressive number of Chinese listed stocks hit their daily loss limits?

A U.S Senate Committee on Banking, Housing and Urban Affairs hearing on innovative potential, market manipulation and criminal activity was the root cause, with a particularly negative bias through the hearing weighing heavily on Bitcoin and the broader cryptomarket. While there were some, not very much, but some positive takes on Bitcoin and the broader market, the focus on manipulation, theft, investor protection and criminal activity came at the wrong time for Bitcoin, with the SEC currently reviewing 9 previously rejected Bitcoin ETFs.

Throw in China’s desire to influence and ultimately bring down the market and the IMF’s stern warnings, there was little surprise that the broader market responded in kind, Bitcoin’s ability to stave off a pullback to sub-$6,000 levels on the day being the only impressive outcome of the day.

In the final hours of the day, there was yet more news for cryptomarket investors to consider, with the Financial Stability Board issuing its post G20 meeting review of the broader market, citing that, while the cryptocurrency market posed no threat to the stability of the global financial system, there was a need for the cryptomarkets to be monitored. The review was in fact published on 10th October and would have provided some pressure on Bitcoin and the broader markets through the earlier part of the day on Thursday in spite of the lack of circulation across the crypto news wires.

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At the time of writing, Bitcoin was up 0.95% to $6,311, with moves through the early morning seeing Bitcoin recover from a start of a day low $6,220.3 to a morning high $6,311, the day’s major support and resistance levels left untested.

For the day ahead, a move through $6,368.2 would support a run at $6,400 levels, while sentiment across the broader market will need to materially improve for $6,500 levels and the day’s first major resistance level at $6,516 to come into play, the crypto landscape unchanged since yesterday’s sell-off.

Failure to move through to $6,368.2 could see Bitcoin hit reverse later in the day, with any pullback through the morning low $6,220.3 likely to bring sub-$6,210 levels into play, raising the prospects of sub-$6,000 levels for the first time since the end of June, though it’s going to need some negative news for Bitcoin to test sub-$6,000 support levels.

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