Yahoo Finance Bitcoin – The Bulls Finally Deliver, but the Job is Far from Done
Bitcoin jumped by 9.85% on Monday, following on from a 0.55% rise on Sunday, to end the day at $3,625.
In stark contrast to the recent trend seen across the broader market, movements through the day were bullish, but were certainly not in the realms of the $1,000 moves in a matter of hours that were seen through the cryptomarket rally this time last year that led Bitcoin to within reach of $20,000.
On the day, Bitcoin recovered from an early morning intraday low $3,280, steering clear of the first major support level at $3,257.47 before finding support from the broader market. A day long rally saw Bitcoin break through the day’s major resistance levels with ease to strike an intraday high $3,744.8 before easing back to $3,600 levels by the day’s end.
It was just yesterday that we had made reference to Bitcoin’s recent trends at the start of the week and influence on the weekly returns thereafter, with Bitcoin having started the week off in the red in every one of the last 8 weeks before Monday’s rally.
The sizeable gains on Monday could finally be a much needed support mechanism for Bitcoin and the broader market near-term, easing the probability of sub-$3,000 levels for now.
While we can expect some particularly bullish chatter through the day, with talks of an anniversary cryptomarket rebound, it’s certainly a little premature to begin talking up the beginnings of a bull run.
As things stand, Bitcoin sits well below the 23.6% FIB of $4,816 and for the Bitcoin bulls to look for a bearish trend reversal, a breakout through the 38.2% FIB of $5,809 is going to be needed and that’s not happening overnight.
The reality remains that, while there is talk of the prospects of greater adoption of the likes of Bitcoin and Litecoin in the real world, following late last week’s news of Lightning Network being ready for deployment by Litecoin, actual adoption of the cryptos is going to be needed to support current price levels and avoid another sell-off.
As for the crypto outlook, next year’s SEC decisions on the Bitcoin ETF applications, the U.S DoJ’s findings into its investigations into price manipulation during last year’s rally and, perhaps of greatest significance, the G20’s planned roll out of rules and regulations for the cryptomarket remain the key drivers for Bitcoin and the broader market near-term.
Monday’s rally saw Bitcoin recover $530 from last week’s swing lo $3,215.2 and rise by $320 on the day. While not a material swing, key will be moves through middle of the week, Bitcoin and the broader market needing to avoid a profit taking sell-off that could ultimately wipe out the start of the week’s gains.
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At the time of writing, Bitcoin was up 0.75% to $3,652.2, with Bitcoin recovering from a morning low $3,606 to hit a morning high $3,684.4 before easing back, the day’s major support and resistance levels left untested early on.
For the day ahead, a move back through the morning high $3,684.4 would support another run at $3,700 levels to give Bitcoin a run at $3,800 levels and the day’s first major resistance level at $3,819.87. There’s going to need to be another Monday style rally for Bitcoin to be able to break out from any move through to $3,700 levels later in the day however, with Bitcoin likely to face plenty of resistance on any run at $3,700.
Failure to move back through the morning high could see some profit taking begin to creep into the market, with a pullback through the morning low to $3,500 levels signalling a possible reversal. Any fall through $3,550 would likely bring $3,400 levels into play before any recovery, while we would expect Bitcoin to steer clear of the first major support level at $3,355.07.
This article was originally posted on FX Empire
