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Bitcoin – Bulls Take a Hit and there May Be More to Come

Bitcoin fell by 3.92% on Monday, reversing the previous week’s 3.92% gain, to end the day at $6,244.

A move through to a start of a day intraday high $6,543.3 was the only bullish move of the day, with Bitcoin falling short of the first major resistance level at $6,557.0 before becoming victim of a broad based market sell-off.

While managing to hold on to $6,400 levels through the morning and steer clear of the day’s first major support level at $6,406.6, pressure from the broader market ultimately weighed, with Bitcoin sliding through the day’s first major support level at $6,406.6 and second major support level ate $6,313.2 to a late in the day intraday low $6,202.8 before partially recovering.

Steering clear of sub-$6,000 levels on Monday would have been the only good news for the Bitcoin bulls, with a failure to break out from $6,500 to $6,600 levels having continued to support the extended bearish trend formed at early May’s swing hi $9,999.

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While there was no particularly negative news doing the rounds across the wires, a number of factors would have contributed to the pullback, one being news of an anticipated pay-out of $1bn worth of crypto by Mt.Gox to its creditors that could see the market flooded with sell-orders, creditors once bitten, twice shy, likely to offload their exposures on receipt that would force the price of Bitcoin and the broader market deeper into the red and even more so, should the extended bearish trend persist and volumes sit on the lower side.

Investors are already jittery over the prospects of unified rules and regulations out of the G20 and the SEC’s continued refusal to approve Bitcoin ETFs to provide institutional support to Bitcoin and the broader market.

Whether the Mt.Gox pay-out ends up crashing Bitcoin and the broader market, which would certainly raise the prospects of Bitcoin falling to previously predicted sub-$5,000 levels, remains to be seen and timing could be everything. If the G20 has rolled out its rules and regs and the cryptomarket is already under the hammer, demand for $1bn worth of crypto may well be on the higher side than if the rules and regs are still pending, uncertainty and expectation of further downward pressure on value likely to limit demand and further depress prices.

Get Into Cryptocurrency Trading Today

At the time of writing, Bitcoin was up 0.03% to $6,254, with Bitcoin recovering from a start of a day morning low $6,228.1 to an early morning high $6,260 before steadying, the moves through the early morning leaving the day’s major support and resistance levels left untested.

For the day ahead, a move through the morning high $6,260 to $6,300 levels would support a recovery of Monday’s losses and bring $6,400 levels and the day’s first major resistance level at $6,457.27 into play, though we will expect Bitcoin to face plenty of resistance on the way through $6,300, with sentiment across the broader market unlikely to materially shift on the day.

Failure to move through to $6,300 levels could see Bitcoin take another hit later in the day, with a pullback through the morning low $6,228.1 bringing sub-$6,200 levels and the day’s first major support level at $6,116.77 into play before any recovery.

While we would expect Bitcoin to steer clear of sub-$6,000 levels and the day’s second major support level at $5,989.53, the news wires could deliver another blow to the Bitcoin bulls to drag Bitcoin deeper into the red.

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This article was originally posted on FX Empire

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