Bitcoin – The Bears Surface for the HolidaysBitcoin joins the rest of the market in an early morning sell-off, with the news wires drawing the bears out in the holidays.
Bitcoin gained 1.67% on Monday, following on from last week’s 23.4% gain, to end the day at $4,140.7.
For the Bitcoin bulls, the all-important positive start to the week was delivered, with Bitcoin having wrapped up a positive start to the week for only the 2nd time since 15th October, supporting a positive outlook for the week ahead.
It’s been a particularly dire year for Bitcoin and the broader market, but last week’s 23.4% gain and another week-long rally would certainly ease the pain, with Bitcoin down 69.9% to Monday’s close.
The broad based crypto rally on Monday saw Bitcoin’s dominance fall further on the day to 51.2%, down from the previous day’s 52%, the downward trend continuing to signal positive sentiment across the broader market.
Supporting the broad based crypto rally has been a lack of negative news across the crypto wires, the bulls enjoying a free end of year run, with the next major key driver expected to come in the SEC’s decision on the Bitcoin ETF applications in February.
Bitcoin looks set to end another year at the top of the rankings by market cap, with Ripple’s XRP sitting a distant second, though whether the rankings will be the same this time next year remains to be seen.
A material shift in the regulatory landscape is expected in the summer of next year, which should deliver some adjustments to investor sentiment across the broader market, with product differentiation likely to become a factor.
For the Bitcoin bulls, the number one ranking will be in the hands of the SEC, another decline of the ETF applications likely to drive investor appetite elsewhere, with the likes of Ripple’s XRP ripe for rebound, supported by a strong product that has already delivered success in the real world.
At the time of writing, Bitcoin was down 5.09% to $3,929.9, a start of a day sell-off seeing Bitcoin fall through the first major support level at $4,011.8 to a morning low $3,909.6 before steadying.
While there were no immediately identifiable causes for the turn of the day sell-off, a number of news releases could well have contributed, reports of Bitmain shutting shop and fresh allegations of fraudulent activity, uncovered by Bitcoin Private’s development team, more bad news as the market awaits the U.S DoJ’s investigation into possible price manipulation during Bitcoin’s record breaking rally of last year.
For the day ahead, a move back through to $4,000 levels and the first major support level at $4,011.8 would be key to supporting a 2nd half of a day rebound, while Bitcoin would need to move through to $4,100 levels to bring $4,200 levels into play, the day’s first major resistance level at $4,326.8 unlikely to be in play on the day.
Failure to move back through to $4,000 levels by the early afternoon could see Bitcoin take a bigger hit later in the day, a pullback through the morning low $3,909.6 bringing the second major support level at $3,882.9 into play before any recovery, heavier losses unlikely on the day.
With Bitcoin back to sub-$4,000 levels in a flash, investors will have been reminded of just how influential the news wires can be, the recent gains coming at a time when the news wires had been particularly quiet, giving Bitcoin and the broader market benign conditions to recoup some of the year’s losses.