Bitcoin – No News Could Be Bad News for the BullsIt’s been a mixed bag for the majors this week and, with Bitcoin continuing to struggle at $3,700, will history repeat itself?
Bitcoin rose by just 0.17% on Saturday. Following a 0.36% gain from Friday, Bitcoin ended the day at $3,676.4.
A bullish first half of the day saw Bitcoin rally to an early afternoon intraday high $3,726.7 before hitting reverse. The rally saw Bitcoin break through the first major resistance level at $3,711.73, whilst coming up short of the second major resistance level at $3,753.46.
Sliding back late in the day, Bitcoin fell to a 2nd half of a day low $3,664.1 before moving back to $3,670 levels and positive territory. A start of a day intraday low $3,664.0 saw Bitcoin steer clear of the day’s first major support level at $3,635.53.
For the current week, a 2nd consecutive day in the green cut the week’s deficit to 1.9%, with Bitcoin in dire need of a late weekend rally to avoid a 4th week in the red for the New Year.
For the bulls, the continued failure to breakout from $3,700 levels and failure to hold onto $3,700 levels throughout the week raises some doubts over whether current levels can be maintained.
On the news front, the main news of the week was an announcement by JPMorgan Chase of its plans to launch JPM Coin to support bank operations. The decision to launch its own altcoin is quite a turnaround following comments made by JPMorgan Chase CEO Jamie Dimon. Jamie Dimon had made some quite scathing remarks about cryptocurrencies in late 2017 and the early part of last year.
The news had weighed on Ripple’s XRP initially, with the prospect of major international banks launching their own cryptocurrencies for cross-border transactions considered a negative for Ripple.
It remains to be seen whether the world’s major financial institutions decide to compete against the decentralized world and agree on a single digital asset that can be used for interbank transactions globally and remove the need for the likes of SWIFT and even Ripple’s XRP. Perhaps more significantly, would be whether the very same banks would cut the transaction times and fees for their customers should they decide to form a crypto union.
Across the top 10 cryptos, it was a mixed start to the weekend. Stellar’s Lumen and BNB saw the heaviest losses on the day, sliding by 2.24% and by 2.2% respectively.
While Tron’s TRX, EOS and Ripple’s XRP also ended the day in the red, Litecoin managed to draw support, rallying by 2.54% on the day.
In spite of some heavy losses in the week, which kicked off with an 8.94% slide on Monday, Litecoin has managed to hold onto $40 levels. The halving event later on in the year continues to be a source of support, though whether Litecoin can breakout to $50 levels remains to be seen.
For the current week, it’s a sea of red across the majors. Tron’s TRX was down by 8.48%, Monday to Saturday, leading the pack into the red, with Litecoin a close second, down by 7.26%.
In spite of Litecoin’s reversal through the week, a 2nd consecutive day in the green saw Litecoin recover the number 4 spot by market cap, with EOS moving back into the 5th spot.
At the time of writing, Bitcoin was up 0.44% to $3,692.6. Bouncing back from a start of a day morning low $3,655, Bitcoin struck a morning high $3,692.7.
Moves through the early hours saw Bitcoin come within range of the first major support level at $3,651.37, whilst falling well short of the first major resistance level at $3,714.07.
For the day ahead
Bitcoin would need to hold onto $3,690 levels through the morning to support a move through to $3,700 levels. A breakthrough to $3,700 levels would bring the first major resistance level at $3,714.07 into play before any pullback.
Barring a major crypto-rally, Bitcoin will likely come up short of the second major resistance level at $3,751.73 and, more importantly, $3,800 levels. Uncertainty over the SEC’s review of the Bitcoin ETF applications and Saturday’s high $3,726.7 will likely keep Bitcoin at bay.
Failure to move through to $3,700 levels could see Bitcoin hit reverse. A pullback through the morning low $3,655 and first major support level at $3,651.37 could see Bitcoin call on support at the second major support level at $3,626.33 before any recovery.
While we would expect Bitcoin to steer clear of sub-$3,600 levels, Bitcoin’s failure to hold onto $3,700 levels this week could test investor resilience later in the day.