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Bitcoin - Looking for Support at $3300 as Scepticism Continues



BTCUSD – Looking for Support at 3300 as Scepticism Continues

In the last week or so Bitcoin (BTCUSD) has been able to consolidate a little as it receives some much needed support from around the $3300 level. A few weeks ago it received some support from around $3700 before dropping further a couple of weeks ago. In the few weeks leading up to the consolidation, BTCUSD dropped sharply to its lowest levels for 2018 after having been quite content to trade right below the current key level of $6500 for many weeks. Up against immense selling pressure it dropped sharply to around $5500 before consolidating for several days before dropping even further to below $4300 before the most recent drop.


It now looks like some considerable effort will be required to get the Bitcoin price back to within reach of the significant level of $6500. It had made several attempts to break higher through the resistance at $6500 however it was sold off on every occasion. In early September Bitcoin fell very sharply from a one month high near $7500 and quickly settled under $6500. The $6500 level has firmly established itself as a level of significance however this is obviously now a considerable distance away and new significant levels will need to be identified.

In the second half of July, BTCUSD enjoyed a strong surge higher moving through the key $6500 level and to the two month high. May and June saw Bitcoin fall strongly losing almost 40% of its value in that short period, from the peak near $10000 in early May to trading levels just below $6500. Throughout April, BTCUSD again rallied well off support at $6500 to approaching $10000, however these gains have been few and far between in 2018.

The price drop for Bitcoin continues into December, after a miserable November, which saw Bitcoin drop 37% which is it worst drop since April 2011, when it dropped 39%.  Despite the falls and the scepticism surrounding Bitcoin, there are still many people who believe in the technology and that the adoption of digital tokens will revolutionize the financial services industry.  However what remains a mystery is how the technology will replace potentially outdated systems and how long the technology revolution will take.  In an interview with Bloomberg, founder of cryptocurrency merchant bank Galaxy Digital Holdings Mike Novogratz said, "Revolutions don’t happen overnight.  While I believe in the underlying technology and believe in the crypto movement, when prices get stupid, I sell. A lot of my friends in crypto just couldn’t let go. They were saying, 'This is going to change the world.'"  Another interesting development in Bitcoin is how the retail trader has mainly disappeared from routine trading activity.  This has left the early adopters and crypto-related firms that traditionally dominated digital coin trading driving exchange volumes.

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The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.

This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.