Bitcoin Struggles for Direction as Bears Hold on

Bitcoin managed to avoid a second day of losses on Tuesday, gaining 1.01% to end the day at $6,838.6, partially reversing Monday’s 3.63% tumble.

The start of the day was a choppy one, following Monday’s sell-off, with Bitcoin falling to an intraday low $6,650 before finding support in the 2^nd half of the day, the morning’s low having held well above the day’s first major support level of $6,525.67.

An afternoon high $6,897.4 came up short of $7,000 levels, the 23.6% FIB Retracement Level of $7,077.17 and the day’s first major resistance level of $7,103.67, with investors remaining cautious in the wake of Monday’s sell-off.

While talk of U.S taxes provided pressure on Monday, regulatory risk continues to be the key hurdle for Bitcoin and the broader markets to jump over in the near-term and, until there is some clarity on the intentions of China, the U.S, Japan and South Korea, to name but a few, Bitcoin is unlikely to enjoy one of the rallies of old.

The good news for now is that there have been no pullbacks to sub-$6,000 levels, but that’s been about it, with investors continuing to lock in profits on daily moves in order to avoid being caught out by the news wires and the threat that governments and regulators continue pose.

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At the time of writing, Bitcoin was up 0.19% to $6,850, with the day having started relatively quietly, Bitcoin moving within the ranges through the early part of the morning.

A morning low $6,809.3 and $6,884 high steered clear of the day’s major support and resistance levels, with investors having little to go on in the wake of Monday’s slide.

Volatility has subsided since the start of the week pullback, with Bitcoin having failed to move back to $7,000 levels for the first time in four days on Tuesday.

For the day ahead, Bitcoin will likely be the catalyst for any major moves across the broader market. A move through to $6,900 levels would certainly bring the day’s first major resistance level of $6,940.67 and $7,000 levels into play, while market sentiment will need to see a vast improvement for resistance at the 23.6% FIB Retracement Level of $7,077.17 to be tested.

Failure to break through to $6,900 levels will likely test investor sentiment through the afternoon, which could see Bitcoin pullback through the morning’s low to test the day’s first major support level of $6,693.27.

The longer-term bearish trend continues to remain intact, with Bitcoin’s failure to move through to the 38.2% FIB Retracement Level of $7,480.57 a reflection of investor caution over the last week.

Bitcoin may have bottomed out, but there’s still the regulatory risk factor to consider and investors will be all too aware of how dire things can get should governments and regulators come down hard on the cryptomarket.

Looking across to the Cboe Bitcoin Futures, the April contract was up $35 to $6,840, providing little direction in the early part of the day.

Elsewhere, NEO led the way at the time of writing, up 2.83%, with Ethereum’s 0.79% gain coming in a distant second.

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