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Bitcoin – Looking to Form a Bearish Trend Reversal

By:
Bob Mason
Published: Jun 19, 2018, 09:18 UTC

A consolidation of Monday's gains today could spell the start of a near-term bullish trend, though with regulators and governments hard at work, it's going to be a tough week ahead.

BTC/USD daily chart, June 15, 2018

Bitcoin gained 4.18% on Monday, following Sunday’s 0.61% fall, to end the day at $6,712.3.

An early dip to an intraday low $6,370.8 saw Bitcoin test the day’s first major support level at $6,391.8 that led into a relatively range bound morning that held Bitcoin back at sub-$6,500 levels, before a broad based mid-afternoon rally saw Bitcoin break through the day’s three major resistance levels to an intraday high $6,849.7.

Unable to hold on to $6,800 levels, Bitcoin pulled back to $6,700 levels, with the relief rally seeing Bitcoin hold above the day’s first major resistance level at $6,540 and second major resistance level at $6,630.6 by the day’s end.

In spite of Monday’s moves and hold above the second major resistance level, the extended bearish trend, formed at 5th May’s swing hi $9,999, continues to remain intact, with Bitcoin having now failed to test selling pressure at the 23.6% FIB Retracement Level since 10th June that was followed by the 13th June swing lo $6,107.9.

There was no material news to drive the rally on the day, with price action likely to have drawn investors in following last week’s losses.

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At the time of writing, Bitcoin was down 0.05% to $6,706, the moves through the early part of the day seeing Bitcoin ease back from a start of the day $6,734.1 high to a morning $6,655 low before recovering to $6,700 levels.

The relatively range bound start to the day has become a common theme for Bitcoin and the broader market    in recent days, with the day’s first major resistance level at $6,917.73 and first major support level at $6,438.83 left untested early on.

For the day ahead, a move back through the morning’s $6,734.1 high would bring the day’s first major resistance level at $6,917.73 and $7,000 levels into play, though sentiment across the broader market will need to see a material improvement for Bitcoin to break back through to $6,800 levels and bring $6,900 levels into play.

Following Monday’s gains and a relatively range bound start to the day, a lack of a move could see investors look to lock in Monday’s gains that would lead to a pullback through to Monday’s $6,370 low, bringing the day’s first major support level at $6,438.83 into play this afternoon.

While the extended bearish trend remains intact following Monday’s gains, moving to $6,700 levels will ease some of the pressure from the Bitcoin bears who have been eyeing $5,000 levels in recent weeks, a consolidation through the day providing further evidence of Bitcoin having bottomed out at 13th June’s swing lo $6,107.9.

Elsewhere in the market it was a mixed bag, with EOS and Cardano’s ADA seeing the heaviest losses, down 2.28% and 1.23% respectively, while DASH led the way amongst the majors, up 1.29% at the time of writing.

The broader market is in need of more support from the crypto bulls and a consolidation today would certainly ease some of the bearish sentiment that has lingered since late April, early May.

BTC/USD 19/06/18 4-Hourly Chart

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About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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