Bitcoin – Stuck in a Bear Trap

Bitcoin tumbled 5.45% on Tuesday, following Monday’s 0.73% fall, to end the day at $6,303.4.

A particularly bearish first half of the day saw Bitcoin slide from a start of the day intraday high $6,685.8, which fell short of the day’s first major resistance level at $6,779.67, through the first major support level at $6,576.27 and second major support level at $6,494.73 to a morning low $6,324.4.

Following a relatively range bound afternoon, a late in the day sell-off saw Bitcoin fall to an intraday low $6,260.1 to call on support at the third major support level at $6,291.33 before recovering to $6,300 levels at the day’s end.

The moves through the start of the week saw Bitcoin fall for a 3^rd consecutive day, with the pullback from the 23.6% FIB Retracement Level of $6,757 at each attempt of a break out to $7,000 levels eventually doing the damage, leaving Bitcoin firmly in the hands of the Bitcoin bears.

With the extended bearish trend formed at 5^th May’s swing hi $9,999 firmly intact, the bulls have their work cut out for them through the middle of the week, with Bitcoin needing to move back through to $6,700 levels to raise the prospects of a run at $7,000 levels and a bearish trend reversal, the latest moves bringing sub-$6,000 levels back into play for the first time since 30^th June.

There was no materially negative news at the start of the week to lead to Bitcoin’s reversal, with a failure to break through to $7,000 levels the likely reason, investors continuing to lock in profits early, as the cryptomarket waits on for the planned roll out of rules and regs by the G20.

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At the time of writing, Bitcoin was up 0.37% to $6,324.9, with Bitcoin recovering from a morning low $6,286.3 to move back into positive territory by late morning.

A start of the day $6,398.8 saw Bitcoin fall short of the first major resistance level at $6,572.77 and well short of the 23.6% FIB Retracement Level of $6,757, leading to the mid-morning pullback, the morning’s $6,286.3 low steering clear of the day’s first major support level at $6,147.07.

For the day ahead, a move through $6,416 would support a run at the day’s first major resistance level at $6,572.77, though we would expect Bitcoin to face stern resistance at $6,500 should Bitcoin find the necessary support to break through to $6,400 levels in the early afternoon that may ultimately leave major resistance levels untested through the day.

Failure to move through $6,400 levels to take a run at $6,500 levels could see Bitcoin move back into the red later in the day, while we would expect the day’s first major support level at $6,147.07 to be left untested through the day, barring particularly negative news hitting the wires.

Elsewhere, Stellar’s Lumen and EOS led the way down with losses of 2.94% and 2.53% respectively, while Monero’s XMR saw solid gains through the morning, up 1.77% at the time of writing, Litecoin a distant 2^nd with a 0.71% gain.

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