Bitcoin – The Bulls Return, but Can They Hold onto the Reins?Bitcoin sees red early on and holding onto $3,700 levels will be key to avoiding a pullback to $3,500 levels.
Bitcoin rallied by 8.31% on Friday, following a 0.39% fall on Thursday, to end the day at $3,724.
In a relatively range-bound start to the day, Bitcoin eased back to an early intraday low $3,425.3 before finding support from the broader market.
Steering clear of the day’s first major support level at $3,416.23, Bitcoin struck a late morning high $3,505.8, breaking through the first and second major support levels ahead of an afternoon rally.
The afternoon rally saw Bitcoin break through the third major resistance level at $3,529.67 to strike an intraday high $3,800 before easing back to $3,700 levels.
It was Bitcoin’s first breakthrough to $3,800 levels and its highest end of day price since 19th January.
The day’s gains took Bitcoin out of the red for the current week, Bitcoin up by 6.35% from Monday to Friday. In spite of the day’s rally, the extended bearish trend remained firmly intact, with Bitcoin continuing to fall well short of the 23.6% FIB of $4,816.
From the top 10 cryptos, Litecoin trail blazed its way through the day, leading the pack with a 29.56% gain. There were also double-digit gains for EOS, which rose by 16.94%, and Ethereum and Bitcoin Cash ABC, which gained 14.28% and 13.19% respectively. Stellar’s Lumen rose by 10.14%
Trailing the pack through the day was Tron’s TRX, which rose by just 4.7%.
The broad-based crypto rally led to a marked recovery in the total market cap, which rose from $111bn levels to a day high $122.26bn before easing back to $120.66bn at the time of writing.
The day’s moves were attributed to comments from SEC commissioner Robert Jackson. The SEC Commissioner suggested in an interview that there would eventually be SEC support for Bitcoin ETFs.
While there was no commitment to this month’s pending decision, the comments renew hopes of a much-needed inflow of institutional money down the track.
At the time of writing, Bitcoin was down by 0.46% to $3,706.9. A bearish start to the morning saw Bitcoin fall from a morning high $3,732.6 to a low $3,702.5 before steadying. The day’s major support and resistance levels were left untested in the early hours.
For the day ahead
A hold onto $3,700 levels would support further upward momentum through the day to bring $3,800 levels back into play. We would expect Bitcoin to come up short of the first major resistance level at $3,874.23, barring another crypto rally, with some profit taking likely to pin Bitcoin back through the day.
Failure to hold onto $3,700 levels could see Bitcoin fall through $3,649.77 to bring $3,500 levels into play before any recovery. We would expect Bitcoin to steer clear of the first major support level at $3,499.53, barring a broad-based reversal.
The reality remains that Bitcoin continues to fall short of $4,000 levels and is currently down by 80.2% from its all-time high back in December 2017. While the bulls will be looking to talk up Bitcoin’s near-term prospects, only a move back through to $5,000 levels would really convince the fence sitters to jump back in.