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Bitcoin – Back in a Rut and Relying on sub-$3,600 Support

Bitcoin fell by 0.46% on Wednesday, partially reversing a 1.67% rise on Tuesday, to end the day at $3,622.3.

Another range bound start to the day saw Bitcoin move within $42 range through the first half of the day, before striking an early afternoon intraday high $3,677.

The particularly range bound morning saw Bitcoin steer clear of the first major support level at $3,506.7, with the early afternoon intraday high $3,677 coming up short of the first major resistance level at $3,726.8.

Bitcoin’s failure to break through to $3,700 levels led to an afternoon reversal, with Bitcoin falling to a late intraday low $3,591.2 before finding support, the first major support level avoided on the day.

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For the Bitcoin bulls, recovering to $3,600 levels by the day’s end was key, with Bitcoin continuing to find strong support at $3,500 levels in spite of the tight ranges and Tuesday’s brief dip to $3,400 levels.

How long the support can continue remains to be seen, with Bitcoin failing to break through to $3,700 levels for a 3rd consecutive day on Wednesday, a downward bias resuming, following Saturday’s brief visit to $3,800 levels.

A lack of news and progress on the regulatory front has ultimately contributed to the lack of upward momentum. Through the final quarter of last year, investors were primed and ready to, not only respond to the SEC’s anticipated review of the 9 Bitcoin ETF applications that it had rejected, but also to the planned roll out of unified rules and regulations by the G20.

Chatter from Davos from Wednesday heard investors be supportive of the Blockchain technology, while suggesting that the value of Bitcoin would or should hit zero. While the market has become somewhat resilient to such chatter, bankers the world over having sledged the cryptomarket on a frequent basis, investor views may have a more material impact. The plans to introduce Bitcoin ETFs into the cryptomarket is to draw in institutional investors after all. If their view is that Bitcoin should be valued at zero, there’s unlikely to be the inflows that many are hoping for…

To make matters worse, the Cboe Exchange withdrew its VanEck SolidX Bitcoin ETF submission.

While the view is that the submission was withdrawn due to the U.S government shutdown, the withdrawal is somewhat of a strange decision when considering the time it has been sitting with the SEC under review. The reality is that, until there are more stringent rules and regulations, the SEC may take the path of least resistance and continue to reject any submissions.

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At the time of writing, Bitcoin was down 0.34% to $3,610.1, with Bitcoin having to rely on sub-$3,600 support early in the day after falling from a morning high $3,623 to a morning low $3,596.9 before recovering to $3,600 levels.

A hold onto $3,600 levels through the rest of the morning would support a run at the first major resistance level at $3,669.13 before any pullback. We would expect Bitcoin to continue to fall short of $3,700 levels on the day.

Failure to hold onto $3,600 levels could see Bitcoin take that much talked about tumble, with a fall through the first major support level at $3,583.33 likely to bring the second major support level at $3,544.37 into play before any recovery. Sub-$3,500 levels will likely be avoided on the day, barring materially negative news hitting the wires.

This article was originally posted on FX Empire

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