Bitcoin – The Bears Take a Bite to Leave Bitcoin Back at Sub-$3,600Bitcoin holds onto minor gains early on, but will need to move back through to $3,600 levels to avoid another sell-off.
Bitcoin fell by 4.7% on Sunday, reversing a 2.36% from Saturday with interest, to end the day at $3,586.1.
The day’s losses wiped out Bitcoin’s gains from the week, which had largely come from a 4.41% rally on Monday, to end the week down by 0.13%.
An early morning intraday high $3,796.9 was the only bullish move of the day, with Bitcoin coming up short of the first major resistance level at $3,871.56 and, more importantly, $3,800 levels before hitting reverse.
Tracking the broader market, Bitcoin slid through the first major support level at $3,644.10 to a mid-day intraday low $3,543.0, calling on support at the second major support level at $3,564.63 before steadying.
Support through the afternoon saw Bitcoin avoid heavier losses whilst failing to recover $3,600 levels, the only positive for the Bitcoin bulls being a move back through the day’s second major support level at $3,543.0.
While there was no particularly negative news to drive Bitcoin and the majors deep into the red, the recently tight ranges and Bitcoin’s failure to push back through to $3,800 levels in the early hours of the day will have contributed to the late morning sell-off.
There’s been a lack of major news to support the broader market, with price support at $3,800 levels waning at the start of the year. A general consensus that the SEC may well hold back on reversing the rejection of 9 Bitcoin ETFs last year contributing to the limited upside that has left Bitcoin with its recent ranges.
For the bears, while a pullback to $3,500 levels to wipe out the week’s gains was a positive, a fall through to $3,300 levels would be needed to bring back chatter of sub-$3,000, Bitcoin having managed to avoid sub-$3,500 levels through the first few weeks of the year.
Elsewhere amongst the top 10, Stellar’s Lumen and EOS saw more than 5% losses, with the broad based sell-off seeing the total crypto market cap slide back to a day low $119.39bn before managing to move back through to $120.21bn at the time of writing.
At the time of writing, Bitcoin was up 0.15% to $3,591.3, a range bound start to the day seeing a morning low $3,586.1 and high $3,597.0 leave the day’s major support and resistance levels untested early on.
For the day ahead, a move through $3,600 to $3,650 would be needed to support a recovery to $3,700 levels to bring the first major resistance level at $3,741 into play before any pullback, chances of a run at $3,800 being limited at best through the day, barring materially positive news hitting the wires.
Failure to move back through to $3,650 levels could see Bitcoin fall back through to sub-$3,500 levels to call on support at the first major support level at $3,487.10. While Bitcoin has enjoyed plenty of support at $3,500 levels in the early part of this year, a broad based crypto sell-off could see Bitcoin call on support at the second major support level at $3,388.1 before any recovery.
While it may ultimately be one of those days in the tight ranges, some downside protection is certainly warranted, with a number of the top 10 majors sitting in the red at the time of writing.