Bulls Under Pressure After Bitcoin Price Retreats from $4K

Sebastian Sinclair
Dec 26, 2018 at 13:20 UTC
Updated Dec 26, 2018 at 13:22 UTC
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Bitcoin’s recent forays into price territory above $4,000 have been beaten back over the holiday, putting the bulls under pressure to regain momentum.

The cryptocurrency had peaked to around $4,140 on Dec. 21, then to over $4,200 on Dec. 24, but dropped sharply back to around $3,720 early yesterday. A small bullish bounce since has now subsided and, at press time, bitcoin is changing hands at $3,762, as per CoinDesk data.

The world’s largest cryptocurrency by market capitalization now looks to be consolidating under a lower low, potentially building momentum for another push above $4,000 should buy pressure persist above two key resistance levels.

Daily chart


Given its recent price action and a revisit to intra-day support levels seen at $3,675, bitcoin looks weakened, having fallen victim to an early holiday sell-off.

In our previous article, we discussed a possible visitation to resistance (R2 on chart) at $4,400, based on the measured Fibonacci extension taken on the daily chart. Bitcoin barely peaked out at $4,236 (R1), however, before it was rejected to lows not seen since Dec. 20, resulting in the formation of the temporary support.

Currently, it would appear that bitcoin doesn’t have the capacity to climb higher, as volume is falling with rising prices on the smaller time frames (1-hour chart, 30-min chart).

Pressure is now mounting for the bulls to make a play above $4,200 or risk conceding the short-term up-trend they had struggled hard to win.

2-hour chart

The bears will now be hoping to force prices down past the temporary support line and to close below $3,650.

The 2-hour volume bars are varied as price action continues to subside from the Dec. 24/25 sell-off, implying reactions are mixed and traders may begin to grow anxious at these levels. If so, another move down is most likely.

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  • A short-term sell-off showed bitcoin’s temporary support lay at around $3,675 with a small bullish bounce triggered from that zone.
  • Bitcoin was rejected from around $4,200 on Dec. 24/25, signalling bullish exhaustion.
  • A drop below $3,650 would dash short/mid-term bullish hopes heading into the new year.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.