Bitcoin rallied by 10.09% on Wednesday. Following on from a 2.29% gain on Tuesday, Bitcoin ended the day at $11,983.
A bullish start to the day set the tone, with Bitcoin on the move from the start of the day. Bitcoin rallied from an intraday low $10,876 to a mid-morning high $11,584.
The moves through the early hours saw Bitcoin break through the 23.6% FIB of $11,275 and the first major resistance level at $11,762.87.
A pullback to sub-$11,000 levels by late morning saw Bitcoin steer clear of the first major support level at $10,087.13 before a late rally.
The late rally saw Bitcoin break back through the 23.6% FIB of $11,275, first major resistance level at $11,323.93, and second major resistance level at $11,762.87 to hit an intraday high $12,025.
Resistance at $12,000 limited the upside on the day.
The Bitcoin rally led to Bitcoin’s dominance rising back to 62% levels. Bitcoin’s market cap jumped to a Wednesday high $213.5bn before easing back.
Bitcoin ultimately provided support to the broader crypto market, leading the majors into positive territory on the day.
For the Bitcoin bulls, the near-term bullish trend, formed at mid-December’s swing lo $3,215.2 remained intact. Bitcoin continued to find support at the 23.6% FIB of $11,275.
Correlations and Considerations
Wednesday’s rally was another day of correlation with the more mature markets. The rally kicked in well ahead of economic data out of the U.S, however. Weak U.S stats continued to support the FED’s projected rate cut later in the day year.
While the cheaper cost of funds is a boon for riskier assets, the current interest rate environment continues to be supportive.
A negative for Bitcoin and the broader market continues to be the prospect of a material shift in the regulatory landscape. There’s also the pending SEC decisions on the Bitcoin ETFs to consider.
The recent volatility across the broader market has come at the wrong time for those hoping for Bitcoin ETFs to be approved. The good news, however, is the fact that there have been no headline cases of exchanges being hacked…
Another piece of good news is the fact that the planned launch of Facebook’s Libra has done no damage just yet…
At the time of writing, Bitcoin was down by 1.63% to $11,787.
In the early part of the day, Bitcoin rose to a start of a day high $12,065 before hitting reverse.
Falling short of the first major resistance level at $12,379.33, Bitcoin fell back to a late morning low $11,503.
Steering clear of the 23.6% FIB of $11,275 and first major support level at $11,230.33, Bitcoin moved back through to $11,700 levels.
For the Bitcoin bulls, $12,000 looks to be the line in the sand.
For the Day Ahead
A hold onto $11,700 levels through the early afternoon would support a move back through to $11,900 levels.
Bitcoin would need the support of the broader market, however, to break out from this morning’s high $12,065.
In the event of a breakout, the first major resistance level at $12,379.33 would come into play before any pullback.
Failure to hold onto $11,700 levels could see Bitcoin slide back through the 23.6% FIB of $11,275.
Barring an extended sell-off through the afternoon, the first major support level at $11,230.33 should limit the downside.
In the event of a sell-off, expect a return to sub-$11,000 levels before finding support.
The article was written by Bharat Gohri, Chief Market Analyst at easyMarkets
This article was originally posted on FX Empire
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