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Bitcoin – Stuck in a Bear Trap

It’s been a rough ride at the start of the week, with the majors seeing relatively heavy losses as the market continues to be gripped by the anticipation of unified global rules and regs that could leave investors with little alternatives to evade the system.
Bob Mason

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 3rd 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 5th 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 30th 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 2nd with a 0.71% gain.

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