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Bitcoin – The Bulls Fail to Breakout from $4,000. Does that Spell Trouble?

By:
Bob Mason
Published: Mar 11, 2019, 05:16 GMT+00:00

It's back in the red for Bitcoin. Avoiding sub-$3,970 levels would support a move back through to $4,000 levels. A breakout may be a challenge, however.

Bitcoin coin on white keyboard

Bitcoin fell by 0.43% on Sunday. Partially reversing a 1.95% gain from Saturday, Bitcoin ended the day at $4,000.

A start of a day intraday high $4,017.2 saw Bitcoin come up short of the first major resistance level at $4,064.37 before hitting reverse.

Falling through the morning, Bitcoin slid to a mid-morning intraday low $3,959.4 before finding support.

Coming within range of the first major support level at $3,952.07, Bitcoin managed to move back through to $4,000 levels. Bitcoin struck a 2nd half of a day high $4,015.9 before easing back.

For the Bitcoin bulls, it was a second consecutive hold onto $4,000 levels by the day’s end. The day’s losses left Bitcoin with a 2.96% gain for the week, Monday through Sunday.

Elsewhere

Across the top 10 cryptos, while it was a mixed bag on Sunday, it was a sea of green for the week.

Binance Coin and Litecoin led the way, with gains of 25.72% and 18.58% respectively. Chasing the pair was Stellar’s Lumen. An 11.6% rally on Sunday gave Stellar’s Lumen a 14.8% gain for the week.

Across the rest of the top 10, the upside was relatively minor. EOS came in a distant 4th in the week, gaining 5.06%

There was no particularly bullish news to drive Stellar’s Lumens on Sunday and the broader market through the week. A lack of a sell-off, with Bitcoin hovering at around the $4,000 level, provided some support.

Moves through the early part of this year had seen Stellar’s Lumen fall behind the majors, in spite of increased crypto adoption. Considered to be a bridge between crypto and fiat money, increased adoption is expected to be positive for Stellar’s Lumen.

While Bitcoin managed to hover at around the $4,000 handle, it now all hangs on the SEC’s review of the VanEck Bitcoin ETF proposal. Following the extended government shutdown, a decision is anticipated anytime, though the deadline is 5th April.

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At the time of writing, Bitcoin was down by 0.36% to $3,985.7. Moves through the early hours saw Bitcoin fall from a morning high $4,009.2 to a low $3,981.0 before steadying. The moves through the early hours left the day’s major support and resistance levels untested.

BTC/USD 11/03/19 Daily Chart

For the day ahead

A move back through to $3,995 levels would support another run at the first major resistance level at $4,025. Bitcoin would need to avoid a fall through to sub-$3,970 levels to support a recovery of the early losses. Barring a broad-based crypto rally, we would expect Bitcoin to fall short of the second major resistance level at $4,050.

A continued failure to breakout from $4,000 has seen resistance buildup in recent days, which will likely pin Bitcoin back.

Failure to move back through to $3,995 levels could see Bitcoin take a bigger hit in the day. A fall through to $3,970 levels would bring the first major support level at $3,967.2 into play. Failure to recover from any pullback could bring the second major support level at $3,934.4 into play. Investor resilience could be tested should Bitcoin fail to break away from its current ranges.

About the Author

Bob Masonauthor

With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.

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