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Bitcoin – $6,700 or $6,200? The Impact on Direction could be Significant

Bitcoin fell by 1.63% on Tuesday, partially reversing Monday’s 4.25% gain, to end the day at $6,509.3.

Bucking the broader market trend through the morning, Bitcoin failed to keep the momentum going in the early hours of Tuesday, with a relatively range bound start to the day seeing an early intraday high $6,675.2 fall short of the day’s first major resistance level at $6,775.13 before easing back to $6,500 levels in the late morning.

A relatively range bound middle part of the day gave the Bitcoin bulls few opportunities, an afternoon high $6,651.1 the only bullish move late in the day, with a broad based market sell-off seeing Bitcoin slide to an intraday low $6,470.5 before recovering to $6,500 levels by the day’s end.

For the Bitcoin bulls, ending the day without testing the day’s first major resistance level will have been an issue, with the late in the day pullback bringing into doubt any near-term bullish trend formation, with Bitcoin continuing to fall short of the 23.6% FIB Retracement Level of $6,757 in spite of last week’s gains and upward momentum in the early part of the week.

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While there was no materially negative news hitting the wires to cause the late in the day sell-off, profit taking ahead of any updates from governments and regulators would have contributed to the slide.

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At the time of writing, Bitcoin was down 0.46% to $6,479.1, with a late Tuesday sell-off continuing into the early hours of this morning before Bitcoin stabilized.

A start of the day slide to a morning low $6,414.1 saw Bitcoin pullback through the day’s first major support level at $6,428.13 before recovering, the negative sentiment across the broader market having limited influence on Bitcoin buyer appetite at $6,400 levels following last week and the early part of this week’s gains.

Bitcoin struck a morning high $6,515.7 in response to the slide through the day’s first major support level, though the morning’s high fell well short of the day’s first major resistance level at $6,632.83 and 23.6% FIB Retracement Level of $6,757 to leave the extended bearish trend intact.

For the day ahead, a move through the morning’s high $6,515.7 to $6,551.67 would support a run at $6,600 levels and the day’s first major support level at $6,632.84, while we would expect Bitcoin to continue falling short of the 23.6% FIB Retracement Level of $6,757 through the day, with resistance at $6,700 levels likely to build through the day.

Failure to move through $6,551.67 to $6,600 levels later in the day could see Bitcoin pullback to sub-$6,500 levels that would see Bitcoin retest the day’s first major support level at $6,428.13 before any recovery, a second fall through the day’s first major support level likely to deliver less support than the first time round.

Bitcoin’s current level and next move is key, with a break through $6,600 levels to $6,700 levels supporting a bearish trend reversal and a likely return to $7,000 levels, while a pullback to $6,200 levels would see the extended bearish trend gather momentum to lead Bitcoin back to $5,000 levels, raising the prospects of sub-$5,000 levels before any sustained recovery.

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This article was originally posted on FX Empire

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