Bitcoin, the Cryptomarket and the Banana PeelThursday was yet another day for investors to forget and things could go from bad to worse if Bitcoin gives up $3,700 levels this morning…
There was nothing mixed about Thursday, with investors deciding that enough was enough.
Bitcoin slumped by 9.07%, following on from a 0.41% fall on Wednesday, to end the day at $3,712.8 the reversal a 4th consecutive day in the red.
A relatively upbeat start to the day saw Bitcoin move through to a mid-morning intraday high $4,143.3, coming within range of the day’s first major resistance level at $4,164.8 before hitting reverse, a broad based cryptomarket sell-off sending all of the majors deep into the red.
The broad based cryptomarket sell-off mid-morning saw bitcoin tumble to a morning low $3,842.0, Bitcoin sliding through the first major support level at $4,032.07 and second major support level at $3,964.13 before steadying.
A range bound middle part of the day failed to restore investor confidence, with Bitcoin taking another tumble in the late afternoon to an intraday low $3,687.2, sliding through the third major support level at $3,804.33.
Bitcoin’s losses for the day and slide back through to sub-$4,000 levels may seem benign relative to the losses seen across the broader market, but the reality is that Bitcoin simply failed to break out from its recent ranges, with the bulls unable to reverse the extended bearish trend formed back at May’s swing hi $9,999.
Of significance for Bitcoin and the broader market was the lack of clarity on the cause of the mass sell-off, which saw most of the top 10 get smacked with double digit losses in a matter of hours, leading to the total crypto market cap sliding back through to $123bn and for Bitcoin’s dominance to climb back up to 52% levels.
The SEC may be reviewing its decision to decline the 9 bitcoin ETFs from last year but, when considering the need to safeguard institutional money, intraday swings and uncertainty over what is ultimately driving Bitcoin and the broader market should be a major concern.
It’s too early to call Thursday’s dump fraudulent or manipulative and, while a dovish FED has been associated with the slide, the reality is that a slowdown in rate hikes should be supportive of leveraged trading that has supported Bitcoin and the broader cryptomarket.
Crypto of the New Year, Tron, slid back to the number 9 spot to leave Litecoin and Stellar’s Lumen safe for now as investor jumped ship.
What’s next and will we see Bitcoin finally hit sub-$3,000 levels and floor out at $2,500?
The weekend and how the market responds to Thursday’s losses will be key to direction through the remainder of the month. It’s not uncommon enough for Bitcoin to see particularly heavy losses and, while Thursday’s loss was the heaviest since an 11% slide back in late November, even the November slide was met with a 10.9% rebound just a matter of days later.
Whether Bitcoin and the broader market can rebound in the days ahead will ultimately be key in setting the tone ahead of the SEC’s delayed decision on the 9 Bitcoin ETFs.
Looking at the crypto board, Tron saw the lightest losses amongst the top 10, down 8.4% at the time of writing, the trailblazer through the start of the year holding onto a large portion of its 2019 gains.
On the other side of the board, EOS was down 16.8% for the day, IOTA down 16%, with Bitcoin Cash ABC down 15.9%, the rest of the top 10 not far behind with double digit losses that was common across the rest of the top 10 and beyond.
At the time of writing, Bitcoin was up 0.09% to $3,716.1, with a hold onto $3,700 levels through the morning key to avoiding another sell-off later in the day, the bears now likely to be eyeing $3,500 levels in a bid to test sub-$3,000 support levels.