Bitcoin – The Bears Take another Bite Out of the CryptosThe bears hit Bitcoin and the broader market in the early hours. Tuesday’s tight ranges give little incentive for the bulls to jump back in.
Bitcoin rose by 0.64% on Tuesday. Reversing a 0.32% fall from Monday, Bitcoin ended the day at $3,513.0.
Recovering from an early morning intraday low $3,475.1, Bitcoin moved through to a late morning intraday high $3,517.5 before easing back.
Steering clear of the first major support level at $3,469.63, Bitcoin came up against the first major resistance level at $3,517.03 before pulling back.
For the bulls, the good news was a hold onto $3,500 at the day’s end, but that was about it. A particularly range bound day, with a spread of just $42, continues to be a test. The lack of upward momentum and relative silence on the news wires has seen Bitcoin become almost docile. That’s never a good thing for investors looking for volatility and double-digit returns. Even the Forex world is becoming all the more alluring at present.
For those looking for a bounce back, one warning signal should be the fact that Bitcoin has not seen a large inflow of investor money at current levels. The lack of interest suggests that current valuations continue to be considered inflated.
How low does Bitcoin need to go to draw in sidelined investors and those looking to finally get in on the act?
Sub-$3,000 would certainly be a better number than $3,500. But even if Bitcoin does slide back to sub-$3,000 it may not end there. Adoption may have improved, but it’s nowhere near the levels needed to create a supply and demand imbalance to generate returns similar to those seen back in 2017.
It was a mixed bag through the day. Making gains alongside Bitcoin were Litecoin, Ripple’s XRP and EOS. Litecoin led the way amongst the top 10, with a 0.89% rise.
On the slide were Bitcoin Cash SV, Bitcoin Cash ABC, Stellar’s Lumen and Tron’s TRX.
Bitcoin Cash SV was the worst performer on the day, sliding by 3.7%, with Tron’s TRX not far behind, down by 2.1%.
Ethereum managed to hold on, with just a 0.04% fall, though a return to sub-$100 levels remains on the cards near-term.
The bias continued to be in favor of the bears on the day.
At the time of writing, Bitcoin was down by 1.86% to $3,447.5. A particularly bearish start to the day saw Bitcoin slide from a morning high $3,521 to a low $3,434.3 before finding support.
Falling shy of the first major resistance level at $3,528.63, Bitcoin slid through the first major support level at $3,486.23 to call on support at the second major support level at $3,459.47.
For the day ahead
Bitcoin will need to move back through to $3,500 levels to support a 2nd half of a day recovery. A move back through the morning high would bring the first major resistance level at $3,528.63 into play. We would expect Bitcoin to come up short of the second major resistance level at $3,544.27.
Failure to move back through to $3,500 levels will likely leave Bitcoin deep in the red. A pullback through the morning low $3,434.3 would likely bring $3,300 levels into play for the first time since mid-December.
For the bulls, support at the third major support level at $3,417.07 could save the day, but there is an inevitability should sentiment across the broader market fail to improve in the coming days.