Bitcoin – Sees Green Early, But Holding On is Another StoryBitcoin sits in positive territory early on, though with the rest of the cryptos in the red, we can expect pressure to build through the morning…
Bitcoin slid by 5.25% on Wednesday, reversing Tuesday’s 1.86% gain, to end the day at $3,772.9, the day’s loss a 4th out the last 7 sessions.
A bearish morning saw Bitcoin fall from a start of a day intraday high $4,000.8 to a mid-morning low $3,831, the pullback seeing Bitcoin hold above the day’s first major support level at $3,799.63 early on, with the morning’s high falling well short of the first major resistance level at $4,150.03.
Support through the late morning saw Bitcoin move back through to $3,900 levels, while unable to break back through to $4,000 levels, which ultimately contributed to the negative sentiment felt across the broader market.
An early afternoon sell-off saw Bitcoin fall through the first major support level at $3,799.63 to an intraday low $3,750 before steadying, with Bitcoin managing to steer clear of $3,600 levels and the second major support level at $3,590.43.
While the Bitcoin bulls have been talking up price action for next year and the prospects of fresh highs, the cryptomarket sat firmly in the laps of the bears, with some of the more bearish forecasting sub-$2,000 levels before any recovery.
Having forecasted $2,000 levels, anything sub-$3,000 is going to have some influence on mining profitability, which could see hash rates decline even further that would raise more questions and doubts on the viability of Bitcoin as an alternative to fiat money.
Wednesday’s broad based crypto sell-off has seen the total market cap pullback to $120.9bn, levels not seen since August of last year, which raises the prospects of a fall back to sub-$100bn before any major inflows, with the downward spiral keeping investors holding onto the side lines for now.
On the news front, there was nothing particular damaging to contribute to Wednesday’s reversal, with investors continuing to respond to regulator chatter, the SEC’s delay and apprehension in approving Bitcoin ETFs and the risk of the U.S DoJ finding that price manipulation had in fact contributed to last year’s rally.
At the time of writing, Bitcoin was up 0.57% to $3,794.4, with moves through the early hours seeing Bitcoin rise to an early morning high $3,830 before falling to a low $3,728.5, the moves through the early morning leaving the day’s major support and resistance levels untested.
For the day ahead, a move back through the morning high $3,830 to $3,841 would support a run at $3,900 levels and the day’s first major resistance level at $3,932.47, with sentiment across the broader market needing to improve to support a break back through to $4,000 levels.
Failure to move back through the morning high $3,830 by the early afternoon could see Bitcoin give up the morning’s minor gains, with a fall back through the morning low $3,728.5 bringing $3,600 levels and the day’s first major support level at $3,681.67 into play.
Holding above 25th November’s swing lo $3,657.6 will be key to avoiding a pullback to sub-$3,500 levels that could ultimately deliver sub-$3,000 levels, with Bitcoin having failed to strike $4,000 levels on just one other occasion since prior to last year’s rally, that being back on 27th November.