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Inferno Tuesday market report

Inferno Tuesday market report

Analysis

A leg down, and the rally is back in question. These are uncertain times.

After an encouraging weekend, bitcoin is back in the red, taking many alts with it. Friday’s rally fizzled on Saturday, topping out at the $6,800 resistance zone.

You’ll remember that the upswing only started on Wednesday, when bitcoin crashed — apparently on the SEC’s news of another ETF delay — only to spike upwards immediately afterwards, covering a space of $450 in a single 4h candle. Things change very fast in Bitcoinland.

This time, though, the change has been in the bears’ favour. Having faltered yesterday, bitcoin tumbled another $200 this morning, wiping out much of its earlier gains.

On the one-day chart, price is now below the 50 MA, indicating renewed downside momentum. We’ll see where the day closes but right now, with a price below $6,400, it’s looking more bearish. The key level to watch right now is the $6,150 zone. A close below that would be a lower low, after a succession of higher lows on the daily (most recently $6,100), indicating the nascent rally is off for for the time being.

There is some encouragement, as the 61.8% fib level (~$6,383) has provided support for now. On the 4h, BTC is oversold on the RSI and has come off the 30 line, just as it fell from the 70 line when overbought last week. Should the situation change and the immediate trend reverse, the area to watch is the $6,800 resistance level bitcoin failed to breach convincingly last time. After that it’s the $7,000 psychological level, a zone which also marks the top of the descending resistance line. Closing above $7,200 would be a confidence boost. Meanwhile 200 daily MA stands at $7,400, which represents another barrier.

Fundamentally, of course, nothing has changed. Bakkt launches in November, likely bringing the beginnings of the influx of institutional money we know is standing on the sidelines. An ETF will be approved sooner or later, but as things stand it may not even be necessary.

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