Bitcoin – Who Will Break First, the Bulls or the Bears?

The weekend has seen resistance at $3,700 and support at sub-$3,500 kick in, suggesting a shift from the current ranges is imminent…
Bob Mason

Bitcoin gained just 0.06% on Saturday, following on from a 0.65% fall on Friday, to end the day at $3,631.2.

Support from the broader market kicked in through the early part of the day, with Bitcoin rallying from a morning low $3,625.4 to a mid-morning intraday high $3,750.0 before hitting reverse.

Sliding back through the late morning and afternoon, Bitcoin fall to an intraday low $6,322.9 before finding support to wrap up the day within some relatively tight ranges.

The morning rally saw Bitcoin break through the first major resistance level at $3,668.27 and second major resistance level at $3,707.63, Bitcoin striking $3,700 levels for the first time since last Sunday.

With the day’s hold onto positive territory keeping the gain for the week at 0.98%, Bitcoin will need to avoid a broad based crypto sell-off to wrap up the week in positive territory and deliver a weekly gain in spite of Monday’s losses.

Elsewhere, it was another bearish day for most of top 10, with Tron’s TRX and Ethereum being the only two other majors to close out the day in positive territory alongside Bitcoin. While Ethereum gained just 0.05%, Tron’s rally continued with a 7.2% gain.

EOS, Stellar’s Lumen and Bitcoin Cash SV saw the heaviest losses through the day, Bitcoin Cash SV down 1.59%, with EOS and Stellar’s Lumen down by 1.22% and by 1.03% respectively.

On the news front, there were no major news events through the day to provide direction, with investor sentiment towards the broader market leading to the late morning reversal to leave most of the majors in the red.

The sharp sell-off suggests that there’s no near-term rebound in sight, with the total crypto market cap continuing to sit at just shy of $120bn.

From the trading side, the good news will be the pickup in volatility, but with rallies proving to be short lived, investors can quite easily be caught on the wrong side should the downside risks not be managed.

For the bulls, the good news on the day was Bitcoin’s avoidance of sub-$3,600 levels, with Bitcoin having fallen to sub-$3,600 levels on the previous 6-days, which could draw in side lined investors later in the day to wrap up the week on a high note.

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At the time of writing, Bitcoin was up by 0.2% to $3,638.6, with Bitcoin managing to recover from a start of a day drop to a morning low $3,594.9 to strike a morning high $3,644.3 before easing back.

While the day’s major support and resistance levels were left untested, sub-$3,600 support came to the rescue of Bitcoin early, having been avoided on Saturday, which could be a test for investors later in the day.

For the day ahead, a move through to $3,670 levels would be needed to bring $3,700 levels and the day’s first major resistance level at $3,713.17 into play before any pullback. Sentiment across the broader market would need to materially improve for Bitcoin to come within range of the second major resistance level at $3,795.13, while Saturday’s high $3,750 will likely pin Bitcoin back from a return to $3,800 levels.

Failure to move through to $3,670 levels could see Bitcoin hit reverse, with a pullback through the morning low $3,594.9 likely to see Bitcoin fall through the first major support level at $3,586.07. While we would expect $3,400 levels to be avoided on the day, the second major support level at $3,540.93 could come into play should the broader market go into meltdown mode.

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