Bitcoin – Can the Bulls Prize Out a Late Weekend Rally?
Bitcoin finds support early to hold on to $6,200 levels, though a move through $6,300 levels is going to be needed to avoid a pullback later in the day.
Bitcoin gained 1.5% on Saturday, partially reversing Friday’s 5.77% slide, to end the day at $6,239.
An early pullback to an intraday low $6,008.1 saw Bitcoin manage to yet again steer clear of sub-$6,000 levels, with the day’s first major support level at $5,919.73 left untested as the broader market continued to decline through the early part of the weekend, sliding through support levels on the way.
Tracking the broader market trend, a sharp move in the late afternoon saw Bitcoin break through the first major resistance level at $6,483.53 to an intraday high $6,499.5, before pulling back late in the day to $6,200 levels.
In spite of the late afternoon move, Bitcoin fell short of $6,500 levels for the first time since 15th July, with the downward trend on intraday highs and lows continuing since late July.
Falling short of the 23.6% FIB Retracement Level of $6,757 and with another week of heavy losses on the cards, left the extended bearish trend intact, with Bitcoin needing to break back through to $7,000 levels to begin a near-term bullish trend formation.
There was no materially negative news hitting the wires at the start of the weekend to influence, with Bitcoin likely to find its true test in the coming week as the global financial markets face a number of geo-political storms, with Turkey, Iran, Russia and China in the mix.
The much debated theory that Bitcoin could replace gold and other safe havens has yet to be proven and, with capital flow restrictions in place and sanctions being handed out like candy, there’s no better time for Bitcoin and the broader market to prove its worth.
At the time of writing, Bitcoin was up 0.59% to $6,269.6, with Bitcoin tracking the broader market in the early hours following Saturday’s trend bucking gain.
A start of a day dip to a morning low $6,162 saw Bitcoin hold well above the day’s first major support level at $5,998.23 to recover to $6,200 levels and break through to an early $6,320.6 morning high before easing back, the early high leaving the first major resistance level at $6,489.63 untested.
For the day ahead, a hold above $6,248.87 through the morning would support a run at the early morning high $6,320.6 to bring $6,400 levels and the day’s first major resistance level at $6,489.63 into play, though Bitcoin will need support from the broader market, with the majors needing to hold on to early gains to avoid a shift in sentiment later in the day.
Failure to hold above $6,248.87 and move through to $6,300 levels could see Bitcoin move into reverse later in the day, with the day’s first major support level at $5,998.23 in play in the event of a broad based market sell-off.
As things stand, we would expect Bitcoin to avoid sub-$6,000 levels, while the extended bearish trend remains intact, Bitcoin sitting well short of the 23.6% FIB Retracement Level of $6,575, with more than a late weekend rally needed to get there.
Bob Mason
David