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Bitcoin – A Weekend Rally or sub-$6,000

Bitcoin fell by 1.78% on Friday, following Thursday’s 2.93% decline, to end the day at $6,399.7, with 4 days of losses in 5 leaving Bitcoin down 12.3% for the current week.

A relatively range bound start to the day saw Bitcoin hold on to $6,500 levels, a late morning intraday high $6,549.5 falling well short of the day’s first major resistance level at $6,725.2. Lack of momentum through the morning led Bitcoin to pullback to an intraday low $6,322.8 before steadying, Bitcoin steering clear of the day’s first major support level at $6,296.1.

Recovering through the early afternoon to $6,400 levels, Bitcoin found sub-$6,400 support to avoid more material losses on the day.

Tracking the broader market, a final hour sell-off ultimately saw Bitcoin give up $6,400 levels by the day’s end, with the moves through the day reaffirming the extended bearish trend formed at 5th May’s swing hi $9,999.

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For the bulls, a steadying of the ship through the afternoon will have provided some relief, with the bears continuing to eye sub-$5,000 levels, though with Bitcoin now sitting well short of the 23.6% FIB Retracement Level of $6,757 and a fair distance from the 38.2% FIB Retracement Level of $7,376 needed to be breached to form a bearish trend reversal, next week’s EU review of the market and concerns over the funding of illegal activity could spell more trouble ahead for the bulls.

Plenty of headwinds remain, including the SEC’s review of the 9 Bitcoin ETF applications that comes in the wake of the latest suggestion of market manipulation, a sizeable short position ahead of the Goldman Sachs news that hit the wires midweek.

Bitcoin-$4,000 would be a blow to the broader market that has enjoyed Bitcoin’s shelter, but for the market to evolve and for product differentiation to eventually have an influence on trends across the majors, a more material correction may be just the tonic the cryptomarket needs to begin drawing institutional money in.

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At the time of writing, Bitcoin was up 0.48% to $6,427.4, with a continuation of Thursday’s late reversal avoided in the early hours, Bitcoin moving back through to $6,400 levels and a morning high $6,467.3 before easing, the early morning moves leaving the day’s major support and resistance levels untested.

For the day ahead, holding above $6,424 through the morning would support a run at $6,500 levels and the day’s first major resistance level at $6,525 later in the day, though Bitcoin will need to break out of its current ranges early, else face the prospects of a reversal, investors somewhat bruised from the losses through the week.

Failure to hold above $6,424 and to take a run at $6,500 levels could see Bitcoin take a hit later in the day, a move through a start of a day morning low $6,397 bringing sub-$6,300 levels and the day’s first major support level at $6,298.5 into play before any recovery, sub-$6,200 levels unlikely to be tested barring materially negative news hitting the wires.

Sentiment is particularly bearish and while there has been some upside early on, the gains are of little relief, investors needing to protect the downside ahead of next week’s EU gathering.

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This article was originally posted on FX Empire

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