Bitcoin – Can the Bulls Deliver the Ever Elusive $4,000?It’s back in the red for Bitcoin. Holding onto $3,900 levels could give the bulls an incentive to jump back in.
Bitcoin rallied by 3.99% on Tuesday. Reversing a 2.18% fall from Monday, Bitcoin ended the day at $3,951.6.
An early morning pullback to an intraday low $3,786.1 was the only bearish move of the day. Steering clear of the first major support level at $3,741.17, Bitcoin recovered to $3,800 levels by late morning.
Tracking the broader market through the afternoon, Bitcoin rallied to an intraday high $3,968.7 before easing back.
The rally, mirrored across the broader market, saw Bitcoin break through the first major resistance level at $3,885.27. Coming up against the second major resistance level at $3,970.23, Bitcoin continued to fall short of $4,000 levels.
Across the top 10 cryptos, it was a particularly bullish day following a mixed bag from the week prior.
Continuing to lead the pack was Binance. A 19.75% rally reaffirmed the near-term bullish trend formed at early December’s swing lo $4.1724. The upside came off the back of a 14.93% rally last week.
Close behind were EOS and Litecoin. The pair gained 16.36% and 14.57 respectively. Less impressive gains were seen elsewhere, with Stellar’s Lumen and Ripple’s XRP seeing the most modest gains of the day. Ripple’s XRP gained 4.4%, whilst Stellar’s Lumen ended the day up 4.51%. The pair were once the market’s ”go to” cryptos when the market was on the move. The baton has since been passed onto EOS and Binance.
Looking at the market caps, Tuesday’s rally saw the total cryptomarket cap rise to $133bn, an $8bn increase on the day.
Providing much-needed support to Bitcoin and the broader market has been an increase in transaction volumes on Bitcoin’s blockchain. A pickup in adoption is certainly a positive, though it remains to be seen whether Bitcoin can hold on.
For Litecoin, this summer’s halving and news of new features due to be introduced have certainly helped the cause.
We are still in the bear market, however, in spite of February’s 11% gain, which was Bitcoin’s first positive month since July of last year.
At the time of writing, Bitcoin was down by 0.74% to $3,922.5. A bearish start to the day saw Bitcoin fall from a morning high $3,957.3 to a low $3,915.0. The day’s major support and resistance levels were left untested in spite of the early pullback.
For the day ahead
A hold onto $3,900 levels through the morning would support another run at $4,000 levels later in the day.
Barring a broad-based crypto rally, however, we would expect Bitcoin to continue falling short off $4,000 levels. In the event of a breakthrough to $4,000, the day’s first major resistance level at $4,018.17 would likely pin Bitcoin back from more material gains.
Failure to hold onto $3,900 levels could see Bitcoin slide through the first major support level at $3,835.57. Barring a mass crypto sell-off, however, we would expect Bitcoin to avoid sub-$3,800 support levels and Tuesday’s low $3,786.1.