Bitcoin – Tight Ranges Return, Which Could Spell Trouble For The BullsThe last time Bitcoin moved within these narrow ranges, it led to a 44% slide at the end of last year. Is history about to repeat itself?
Bitcoin fell by 1.26% on Friday, bringing to an end its longest sequence of gains since the start of the year, to end the day at $3,675.7.
The day’s losses reduced Bitcoin’s gains for the week to 2.36%, with Monday’s 4.41% rally supporting a partial recovery of the previous week’s hefty loss, which saw Bitcoin slide by 13.9% to $3,500 levels and, more importantly, give up the $4,000 handle.
A relatively bearish day saw Bitcoin slide from a start of a day intraday high $3,723.9 to an early evening intraday low $3,652.4 before finding support. The moves through the day left the day’s major support and resistance levels untested, with Bitcoin moving within a particularly tight range through the day.
The spread between the start of the day high and evening low was just $71.5, only the second sub-$100 for the year, the narrowest range for the year having been on Saturday, with just a $67.4 spread between the day’s peak and trough.
There’s been plenty of talk of the return to tight ranges, with sub-$100 ranges having been prevalent in October and November of last year, an 18th November $92.6 the last sub-$100 range of the year, which was when Bitcoin stood at $5,600 levels.
If history is anything to go by, Bitcoin tumbled from an 18th November day high $5,745.6 to a 15th December swing lo $3,215.2, logging in a 44% slide to wrap up a dismal year for the Bitcoin bulls.
Tight ranges have tended to lead to reversals and, with a lack of positive news events to draw in side lined investors, another slide could be on the cards once more, particularly with the SEC’s pending decision on the 9 Bitcoin ETFs now unlikely to be delivered in February, a freeze on all SEC activity due to the U.S government shut down having been announced in the week.
The SEC is currently scheduled to deliver its decision on 24th February, but with little progress on regulations having been made and a number of key issues yet to have been addressed, including the practice of price manipulation, the U.S government shut down may be a blessing in disguise for the Bitcoin bulls.
At the time of writing, Bitcoin was up 0.29% to $3,686.2, with a start of a day morning high $3,690 and low $3,673.9 leaving the day’s major support and resistance levels untested, in what’s been another range bound start to the day.
For the Bitcoin bulls, a hold onto $3,680 levels through the morning would support a move back through to $3,700 levels to bring the first major resistance level at $3,715.6 into play. Support from the broader market would be needed for Bitcoin to take a run at the second major resistance level at $3,755.5, while Bitcoin will likely to continue to fall short of $3,800 levels, the downward trend on intraday highs now having hit a 4th consecutive day on Friday.
Failure to hold onto $3,680 levels could see Bitcoin come under selling pressure later in the day, with a fall through the first major support level at $3,644.10 bringing the second major support level at $3,612.50 and sub-$3,600 levels into play before any recovery.
For the Bitcoin bulls a breakout to $3,800 levels is going to be needed to shift sentiment across the broader market and the longer the tight ranges continue the harder it may be for the bulls to deliver…