Bitcoin – Bulls Walk into Another Bear TrapBitcoin’s looking to make a comeback. A move through to $3,900 levels is going to be needed to avoid another reversal…
Bitcoin slumped by 9.04% on Sunday. Reversing a 3.79% gain from Saturday, Bitcoin ended the day at $3,831.3.
A bullish start to the day saw Bitcoin rise to an early morning intraday high $4,282.4 before hitting reverse. The early rally saw Bitcoin come up short of the first major resistance level at $4,306.87. More importantly for the bulls, Bitcoin failed to make a move on $4,500 levels, a target needed to remove the prospects of a near-term reversal.
Tracking the broader market, Bitcoin tumbled to an intraday low $3,812 before steadying. The reversal saw Bitcoin slide through the first major support level at $4,065.67 and second major support level at $3,919.13.
Sunday’s bear-trap left Bitcoin down by just 0.03% for the week, Monday through Sunday.
Across the top 10 cryptos, it was a sea of red. Following a particularly bullish couple of days, the week’s trailblazer EOS saw the heaviest losses on the day.
EOS tumbled by 16.95%, with Ethereum close behind with a 16.37% loss. The day’s losses left EOS with a 23.3% gain for the week. In contrast, Ethereum fell by 0.43%.
It wasn’t the first time that investors will have been caught in a bear-trap. Momentum continued into the early hours from Saturday before the afternoon sell-off. Joining Bitcoin and Ethereum in the red for the week were Tron’s TRX and Ripple’s XRP.
The broad-based crypto sell-off saw the total market cap slide from Saturday’s $141bn levels to $127bn levels.
There were no major news events to create the reversal, as there had been no major news events to drive the rally in the days prior.
With the SEC’s Bitcoin ETF decisions pending, the choppy market will give the decision makers some food for thought. 10% daily swings are something that institutional investors are less accustomed to, particularly when there are no apparent reasons for the swings.
At the time of writing, Bitcoin was up by 1.25% to $3,879.1. Bitcoin moved from a start of a day morning low $3,830 to a morning high $3,886.9 before easing back. The day’s major support and resistance levels were left untested. More significantly, Bitcoin failed to make an early move back through to $4,000 levels.
For the day ahead
A move through the morning high $3,886.9 to $3,975 levels would be needed to bring $4,000 levels back into play. For Bitcoin to take a run at the first major resistance level at $4,138.47, support from the broader market would be needed. Failing a broad-based crypto rebound, however, we would expect Bitcoin to come up short of $4,000 levels on the day.
Failure to move through to $3,900 levels could see Bitcoin give up some of the morning gains. A fall through $3,850 would likely see Bitcoin fall to $3,700 levels before any recovery. Barring another broad-based sell-off, we would expect the first major support level at $3,668.07 to be left untested on the day.