Bitcoin – Holds onto $4,000 Levels as the Bulls Search for MoreBitcoin recovers from an early dip but will need to hold onto $4,000 levels to avoid a pullback through the afternoon. Testing times…
Bitcoin gained 0.31% on Tuesday. Following on from a 6.49% rally on Monday, Bitcoin ended the day at $3,989.9.
Momentum from Monday continued into Tuesday, with Bitcoin rising to a morning high $4,048 before sliding to an early morning intraday low $3,936.
Steering clear of the day’s first major support level at $3,794.13, Bitcoin rallied to an early afternoon intraday high $4,083.5 before hitting reverse.
Bitcoin came up short of the first major resistance level at $4,091.53 and the chance of a return to $4,100 levels for the first time since 10th January. Pulling back late in the day, Bitcoin slid to a 2nd half of a day low $3,964.6 before recovering. In spite of the recovery, Bitcoin was unable to hold onto $4,000 levels by the day’s end.
Across the top 10 cryptos, Binance and Stellar’s Lumen trail blazed their way through the day. Binance ended the day up 9.19%, with Stellar’s Lumen gaining 7.02%.
While Ethereum was the sole top 10 crypto in the red going into the final hour of the day, a broad-based reversal saw a number of the majors give up gains made from earlier in the day.
Leading the way down was Bitcoin Cash ABC, which ended the day with a 1.4% loss. Ethereum was close behind, down by 1.31%, with Tron’s TRX and Litecoin also seeing red.
The broad-based gains through the large part of the day were supported by Bitcoin’s return to $4,000 levels, with a lack of negative news easing pressure on the cryptomarket in February.
In spite of the recent run, the late reversal was a reminder of the downside risks, with the latest rally a possible bear trap when considering the lack of a catalyst to drive the February rebound.
Time will tell whether the bulls will be able to hold onto the reins. It was only back in late December that Bitcoin had managed to rebound from its swing lo $3,215.2 to hit a December high $4,384 before the pullback.
Investors will be wary of the downside risk, which could lead to a shift in momentum should key levels not be maintained.
At the time of writing, Bitcoin was up by 0.51% to $4,010.2. Recovering from an early morning low $3,963, Bitcoin rose to a morning high $4,015 before easing back.
Moves through the early morning left the day’s major support and resistance levels untested early on.
For the day ahead
Bitcoin would need to hold onto $4,000 levels through the morning to support a run at the first major resistance level at $4,070.27.
Barring a broad-based crypto rally, we would expect Bitcoin to continue to come up short of $4,100 levels, with the day’s first major resistance level and Tuesday’s high $4,085 likely to pin Bitcoin back on the day.
Failure to hold onto $4,100 levels could see Bitcoin fall through the morning low $3,963 to call on support at the first major support level at $3,922.77 before any recovery. Sentiment across the broader market would need to materially deteriorate for Bitcoin to see heavier losses on the day.
Through the first part of the week, sub-$4,000 support levels have delivered, which will likely continue to support the bulls through the mid-part of the week.