Bitcoin – A Weekend Rally or Dead Cat Bounce?

Bitcoin fell by 2.01% on Friday, following on from a 6.37% slide on Thursday, to end the day at $3,460, a 4th day in the red for the current week leaving Bitcoin down 17.08% Monday through Friday.

Following November’s 36.6% slide, the early part of December has given the Bitcoin bulls very little to cheer about, with Bitcoin down 14.32% for the current month, the sell-off coinciding with the some of the world’s major indexes also seeing heavy losses the early part of the month, in relative terms.

For Bitcoin, a relatively range bound first half of the day provided little relief, with Bitcoin eventually getting hit. A late afternoon slide saw Bitcoin fall through the first major support level at $3,381.77 to an intraday low and new swing lo $3,277.6 before finding support.

A late rebound saw Bitcoin strike an intraday high $3,630, falling short of the first major resistance level at $3,801.47, to ease back to $3,400 levels by the day’s end.

For the Bitcoin bulls, while Bitcoin struck a new swing lo, holding onto $3,000 levels through the day was key, with the cryptomarket’s total market cap also managing to avoid sub-$100bn levels with a Friday low $103.54bn.

For the cryptomarkets, hopes of Christmas cheer with an approval or two of a Bitcoin ETF may have evaporated, but February is not far off and, while the negative bias felt across the broader market will be tough to shake off near-term, there is at least some hope of a better 2019.

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At the time of writing, Bitcoin was up 0.84% to $3,489.0, with the week’s slide towards sub-$3,000 hitting pause going into the weekend.

A bullish start to the day saw Bitcoin strike a morning high $3,549.7, coming up short of the first major resistance level $3,634.13, before easing back to $3,400 levels, with a start of a day morning low $3,460 steering well clear of the first major support level at $3,281.73.

For the day ahead, a hold above $3,455 would support a move through the morning high $3,549.7 to bring $3,600 levels and the day’s first major resistance level at $3,634.13 into play before any pullback. Following some hefty losses across the broader market through the week, current price levels have lured some back into the market.

Caution is needed through the day however, with the majors having enjoyed bullish starts to the day on previous occasions only to hit reverse, investors wary of major swings and heavy losses that have contributed to the jump in volatility.

For Bitcoin, failure to hold above $3,455 could see the remainder of the morning’s gains be given up, with a fall through $3,455 bringing $3,300 levels and the day’s first major support level at $3,281.73 into play.

With Bitcoin managing to move away from sub-$3,000 levels in the early hours, the cryptomarket total cap has also moved up through to $112.08bn, some of the majors finding strong support, though whether Bitcoin and the broader market can enjoy a sustained weekend rally remains to be seen.


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