Welcome Infernites! Our bi-weekly market report is a day late this week because, well, it’s Christmas and we were busy.
Last week saw an impressive bounce from the $3,100 bottom, but the rally failed at resistance. We’re now looking at retesting support – potentially at multiple levels – and then we’ll have more data on the state of this rally.
While the move up from $3,100 – roughly coinciding with that all-important 200 weekly moving average – was strong, puncturing several resistance zones, it faltered at $4,250. This level was established as strong support on the way down, and duly became resistance on the way back up. Right now we’re back below $3,800, leaving questions about how much further a fall is likely.
Strong rallies don’t come out of nowhere. They build a foundation, and that’s what we’d need to see here. We would expect a retest of $3,600 at the very least, and very likely the 200 WMA or $3,200 level too. That’s required to in order to know whether bitcoin is bottoming.
Since we did not see particularly high volumes last time the price was that low, we’re skeptical and still expecting a final move lower – but, as we know, bitcoin keeps us guessing. The new year is coming, with the promise of new infrastructure and new developments, and our hunch is that time is running out for the bear. He just might have a little more strength in him yet.
What’s indisputable is that bitcoin is showing signs of life. Even if prices are falling, volume is back. And overall, the new year is likely to be a good one for crypto.
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