Bitcoin – The Volatility is Back and so are $4,000 Levels, for now…Bitcoin holds onto $4,000 levels early on, with a run through to $4,200 levels needed to ease the prospects of another sell-off near-term.
Bitcoin gained 4.09% on Sunday, partially reversing Saturday’s 11.14% slide, to end the day at $4,089.1, the late weekend relief rally reducing the week’s losses to 27.75%.
A particularly choppy end to the week saw Bitcoin slide to a late morning intraday low and new swing lo $3,657.6, calling on support at the day’s first major support level at $3,656.53 before a broad based cryptomarket rebound kicked in.
The recovery through the early afternoon saw Bitcoin break through $4,000 levels to strike a late in the day intraday high $4,233.2 before easing back to sub-$4,100 levels, the day high coming up short of the first major resistance level at $4,366.13.
For the Bitcoin bulls, there would have been some relief from the recovery to $4,000 levels, with pressure on the network easing through the day, Bitcoin’s hash rates finding some upside through the weekend, though mining profitability will continue to be a key concern for the network until efficiency gains are made through technology and energy sourcing.
On the news front, the bears ate their pound of flesh through the weekend, with Sunday’s gains providing just a little relief for the bulls, the key line in the sand for the Bitcoin bulls being $4,000 near-term, Bitcoin needing to hold onto $4,000 levels to avoid another sell-off and a possible slide to $2,000 levels.
If Bitcoin’s dominance, which was at 54.1% at the time of writing, is anything to go by, the bearish sentiment remains firmly in place in spite of upward momentum on Sunday and a mixed start to the day across the broader market, suggesting that some caution is required through the day, Bitcoin and the cryptomarket yet to show a material rebound from the September low struck on Sunday morning.
At the time of writing, Bitcoin was down 0.21% to $4,097.5, with moves through the early morning seeing Bitcoin rise to a morning high $4,196.9 before pulling back to a morning low $4,036.6.
While the day’s moves left the major support and resistance levels untested, holding onto $4,000 levels through the early hours will have been key, though the Bitcoin bulls are not out of the woods just yet.
Moving in and out of the red at the time of writing, Bitcoin will need to break back through $4,100 levels and take another run at $4,200 levels to ease fears of another cryptomarket sell-off, with Bitcoin needing to lead the way, gains for Litecoin and DASH unlikely to have a material influence on investor sentiment towards the broader market.
Failure to move back through $4,100 levels and a pullback to sub-$4,000 levels could well lead to another meltdown, with the day’s first major support level at $3,753.4 in play should sentiment deteriorate later in the day.
We can expect plenty of chatter on whether that’s as low as Bitcoin will go and holding onto $4,000 levels will likely begin to see year-end price targets revised, the more bullish likely to be aiming at $8,000 – $10,000 levels by late December, which could spur some support, though it was this time last year that separated the crypto winners and losers, investors jumping in at the December highs getting their fingers burnt while November buyers would have at least found some upside before the sell-off.
Without doubt, the cryptomarket volatility of old has returned and while there will be hopes of a rebound, there are still plenty of headwinds to hit the market with another sledgehammer.