Bitcoin – It’s Choppy Out There and the Bears Want $2,000Another day of red for Bitcoin sees early gains for the month wiped out, with this morning seeing Bitcoin struggle to regain $4,000 levels. An omen?
It’s not getting much better for the Bitcoin bulls or the broader cryptomarket in general for that matter, with the start of December giving investors little respite from the November slide, Bitcoin sliding by 6.51% on Monday, following on from a 1.61% fall on Sunday.
Of significance will be the pullback to sub-$4,000 levels and failure to recover by the day’s end on Monday, the bearish start to the week wiping at the bullish start to the month that had given the Bitcoin bulls hope of another December rally.
When considering the fact that Bitcoin coughed up 36.6% in the month of November, Saturday’s 5.02% gain and expectations of a partial recovery would have been a reasonable, but this market has got the bears out in force and there’s still a long way to go before investors are free from sell-offs that can result from an array of news worthy events.
Price manipulation, investigations into price manipulation, an anticipated shift in the regulatory landscape and of course, hacking and thefts, hit the news wires on a regular basis and the start of the week sell-off was a reminder yet again of a need to bide one’s time before jumping back into a market that has seen volatility return in style.
Following a pickup in Bitcoin’s hash rate through the weekend, coming off the back of Saturday’s rally, it’s of little surprise that the downward trend has resumed and, while it may be a chicken and an egg scenario, with hash rates more likely to respond to price action than the reverse, the fact that miners are looking elsewhere for income has significance.
After recovering to as high as $139bn, the total crypto market cap is back down at $126.72bn and the way things are going, sub-$100bn levels, with Bitcoin at sub-$3,000, are still distinct possibilities, particularly with the likes of the SEC monitoring directions and price action closely.
At the time of writing, Bitcoin was up 0.3% to $3,913.0, with Bitcoin managing to recover from an early morning dip to $3,840 to strike a morning high $3,949 before easing back, the day’s major support and resistance levels left untested early on.
It’s going to be a case of if and not when Bitcoin will recover to $4,000 levels later today, with the bulls needing to find $4,000 levels in the earlier part of the day for Bitcoin to avoid a pullback to last week’s swing lo $3,657.6.
For the bulls, a move back through $3,974 would support a break through to $4,000 levels to ease some of the pain and raise the prospects of a bounce back from Monday’s sell-off to bring $4,100 levels and the day’s first major resistance level at $4,117.3 into play, though with the increased level of volatility, we can expected investors to be looking to take some froth off the top should there be any intraday rallies, which would limit the upside.
Failure to move back through $3,974 and it could be another sell-off later in the day, with a fall through the first major support level at $3,757.6 bringing $3,600 levels into play before any recovery and $3,600 levels will certainly see a buildup of bearish chatter, sub-$3,000 levels the bears target.