Bitcoin – The Bears Take a BreatherA relief rally on the way or just a pause in the downward spiral? Holding on to $6,300 levels will be key through the morning.
Bitcoin’s troubles continued on Wednesday, falling by 6.62% off the back of Tuesday’s 3.27% decline, to end the day at $6,273.9.
Negative sentiment towards the latest SEC delay tactic on approving Bitcoin ETFs was left accountable to the broad based market sell-off, with Bitcoin sliding through the first major support level at $6,544 and second major support level at $6,374 to an intraday low $6,128.2.
A late recovery to $6,200 levels was of little consolation to the Bitcoin bulls, with Bitcoin now having some distance to cover to attempt a break back through the 23.6% FIB Retracement Level, with sub-$6,000 levels in sight. 3-consecutive days of losses reaffirmed the extended bearish trend formed at 5th May’s swing hi $9,999.
For the Bitcoin bulls, the only good news on the day was that sub-$6,000 levels were avoided, with Bitcoin also managing to avoid striking a new swing low, a comfort that many of the other major cryptos were unable to enjoy.
The broad based market sell-off has been particularly telling, with the total cryptomarket cap sliding from $300bn levels to sub-$220bn levels before support kicked in, Bitcoin’s market cap pulling back to a Wednesday low $107.08bn.
On the news wires, there was nothing new to drive the market into a selling frenzy for a 2nd consecutive day, the speculative nature of cryptocurrency investors driving the sell-off and ultimately demonstrating why there is a growing need for an influx of institutional money by way of Bitcoin ETFs.
At the time of writing, Bitcoin was up 0.37% to $6,303.7, with the range bound end of the day on Wednesday continuing into the early hours of this morning.
A start of a day morning low $6,268.4 and early morning high $6,329.9 saw Bitcoin steer clear of the day’s major support and resistance levels in the early hours, though a pullback from the early high could ultimately be the deciding factor on Bitcoin’s direction through the morning and early afternoon.
For the day ahead, a move through the morning high to $6,370 levels would support a run at $6,500 levels to bring the day’s first major resistance level at $6,619.93 into play, though for Bitcoin to find such momentum, a hold at $6,300 levels through the early morning will be a must and sentiment across the broader market will need to see a significant improvement.
Failure to hold on to $6,300 levels and move through to $6,370 could see Bitcoin hit reverse for a 4th consecutive day, a sell-off likely to see Bitcoin pullback through Wednesday’s $6,128.2 low to test the day’s first major support level at $6,028.03.
While Bitcoin managed to avoid new swing lo levels in the latest sell-off, a failure to make a move back through to $6,400 levels will be a negative, though some support is bound to kick in at current levels, with the latest slide coming off the back of a delay to a much needed approval of Bitcoin ETFs rather than material shift in the regulatory landscape.