Bitcoin has continued to trade on the back-foot today, with prices down 10%. The failure to recapture the $40,000 level has hurt momentum, which in turn has led to buyers displaying patience and waiting for lower levels. Those area's of interest are now upon us, so it will be an interesting end to the week as the bears push for a sub $30,000 print.
The news that BlackRock filed with the SEC to trade Bitcoin derivatives has been shrugged off: Had they said they were buying the underlying asset, we may have seen a stronger reaction.
Things can change very quickly in the digital asset world: Sentiment drives the voices on Twitter and I would estimate we are around $4,000 away from a full-on Twitter melt-down! However, fundamentally, nothing has changed the core messaging.
The supply dynamic is still showing a worrying trend as 270,000 Bitcoin head for known accumulation wallets, depleting exchange balances, which now sit at their lowest levels since August 2018.
Since this rally kicked off on the 11th of December, we have seen prices move up from $17,580 to $41,986. Fibonacci numbers are a widely followed technical indicator - the 50% retracement level of the above move sits at $29,784. It's likely we will see a wall of buying around that area. Should we fail to reach it, there will be more than a couple of buyers chasing the market back up...
Despite closing above support at $34,820 Bitcoin has seen one-way traffic today. As prices broke down through $34,820, momentum picked up and took prices straight to our next support level of $32,300. It remains to be seen if this level will be where the bulls put up a fight.
Should we carry on moving lower, we expect $29,980, $28,900 and $28,000 to stem the tide of selling. A move back above $32,300 will lead us back to $34,800 and offer the possibility of a push back to $35,868.
The key question is: Is this the start of a deeper retracement or merely the testing of the range floor?
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It looks like crypto isn’t correlated to traditional markets, at least not during this past session.
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