Bitcoin in Reverse, while Some of the Majors Make a Move

Following a solid rally last week, Bitcoin had a mixed day on Monday, with a late in the day move through to an intraday high $11,688 doing very little to free Bitcoin from its current rut. Bitcoin broke through its first major resistance level of $11,591 only to go into reverse, ending the day at $11,348.9, a 1.14% loss for the day.

A breakout from its $1,500 level provided little incentive to investors on the side lines to jump in with the day’s high enough for Bitcoin holders to hit the sell-button before the end of the day.

While Bitcoin managed to hold off a decline through to its first major support level of $11,203 on the day, the failure to break through to $12,000 since January will be an issue

There may be some comfort in the knowledge that Monday’s end of day slide was seen across the major cryptocurrencies and not just confined to Bitcoin, but for Bitcoin to have any chance of being recognized as a real alternative to fiat money, some degree of price stability will be needed.

Concerns over falling transaction volumes continue to weigh on Bitcoin’s value, with the adoption of Bitcoin and its use in the real world having been on decline this year, which is never good for a cryptocurrency whose value will be based on supply and demand and ultimately its usage as an alternative to fiat money.

It’s unclear whether the introduction of LitePay has had any influence on transaction volumes, with LitePay having only just been released in late February. The existence of an alternative platform that behaves more closely with the likes of Visa will certainly be an issue, if not now, then further down the road.

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At the time of writing, Bitcoin was down 1.03% to $11,301.17, with Bitcoin’s intraday low $11,163.98 having already tested its first major support level of $11,203 in the early hours of this morning.

The morning low and the sideways move shortly afterwards is unlikely to be of much comfort to investors, particularly when some of the other major cryptocurrencies have been on the move this morning.

For now, we continue to see Bitcoin’s dominance hold at 41% levels, which suggests support remains intact at current levels, though support may soften should Bitcoin continue to fall short of $12,000 amidst a cryptomarket that is beginning to see some divergence in performance amongst the majors.

For the day ahead, a fall back through to $11,250 would likely see Bitcoin test its first major support level again, though we don’t expect a more material sell-off to sub-$11,000 through the day, barring the release of materially negative news.

Looking across at the Cboe Bitcoin futures, the March contract was down $360 to $11,210, which will certainly not support any push through to this morning’s $11,420.01 intraday high, a move that would be needed for Bitcoin to test resistance levels and have a run at $11,800.

While the leading cryptocurrency majors were in the red through the early part of the morning, the ‘tail enders’ were on the move this morning, NEM’s XEM and Stellar’s Lumen leading the way, with gains of 2.96% and 2.43% respectively, while Ripple’s XRP managed to claw back 1.65% following Monday’s late in the day tumble.

The trio are bucking the trend and investors are looking beyond Bitcoin for direction, which is going to be ever more important for the longevity of the cryptomarket.

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