The Bitcoin market had seen a surprise price surge on February 8, 2019 when the coin had surged by a total of 11%, allowing price action to reach a peak of $3,802 before stalling.
After an extended period of downward price movements, it seemed that price action would continue its bearish trend and create fresh lows beneath the $3,421 handle. However, the market held at $3,421 and proceeded to rally significantly which brought the total market cap value for the cryptocurrency back above the $60 billion level.
From the Bitcoin market cap graph below, we can see that the market cap has now risen higher and is trading around the $64 billion level.Source: Coinmarketcap
Last week, it was reported that SEC commissioner Robert J. Jackson believes that the approval of a Bitcoin ETF is inevitable . He stated that it’s not a question of if the Bitcoin ETF will be approved, but a question of when.
The SEC has a very strict procedure in allowing funds to be developed as investment instruments as it is their duty to protect American investors. So far, there have been a plethora of proposed ETFs that have been denied by the SEC as these requirements have not been met.
The SEC has cited concerns over liquidity, custody and market manipulation as reasons why the ETFs have been constantly rejected. However, the recent comments by the SEC commissioner has brought a new wave of optimism into the market as he believes that there will eventually be a proposal that will meet the established guidelines for approval.
Let us continue to take a look at the BTC market and highlight some potential areas of support and resistance moving forward.
The recent price surge has now brought Bitcoin up by a total of 5.43% over the past 7 trading days as the cryptocurrency trades around a price of $3,695, at the time of writing.
However, the market still has a long way to recover after losing close to 10% over the past trading month and a further price decline of 43% over the past 90 trading days.
The current market cap of the market is now $63.98 billion after the 69-month old cryptocurrency godfather trades at a value that is 81% lower than its all-time high price.
Since our last BTC price analysis , the market had held at the support identified at the short-term downside 1.618 Fibonacci Extension level (drawn in blue) priced at $3,421.
The market then proceeded to rally aggressively on February 8, 2019 as the market stormed through major resistance at the $3,500, $3,600 and $3,700 handles in a few short hours and created a fresh price high for the market during February 2019.
Price action then met strong resistance at the short-term .5 Fibonacci Retracement level (drawn in green) priced at $3,802 before the market rally halted and reversed.
After reaching this area of resistance, price action then rolled over and started to decline. BTC continued to slowly decline until it reached support at the short-term .618 Fibonacci Retracement level (drawn in green) priced at $3,664.
BTC/USD then attempted to ascend again but met resistance at the $3,750 level and fell once again.
The recent price surge has caused the market trend to shift from a bearish trend into a bullish trend in quick succession. The break above the $3,569 handle is what had rendered the market as bullish as price action created a higher high.
For this bullish trend to continue, we would need to see price action break above the $3,802 handle. If the market drops below support at $3,664, this will render the market as neutral.
For this market to be considered bearish, we would need to see price action break below the $3,500 handle.
If the bulls can continue to hold at the support provided by the short-term .618 Fibonacci Retracement level (drawn in green) priced at $3,664 and continue higher, we can expect immediate resistance above to be located at the $3,750 handle.
If price action continues higher above $3,750, there is immediate resistance above at the short-term .5 Fibonacci Retracement level (drawn in green) priced at $3,802.
Further resistance towards the upside can then be located at the bearish .5 Fibonacci Retracement level (drawn in red) priced at $3,851, closely followed with more resistance at the $3,882 handle.
If the bullish momentum proceeds to push price action higher, we can then expect more resistance at the bearish .618 Fibonacci Retracement level (drawn in red) priced at $4,001.
Alternatively, if the sellers regroup and push price action below the current support at the $3,664 handle, we can expect immediate support beneath to be located at the $3,590 handle, closely followed with more support at the previous short-term downside 1.272 and 1.414 FIbonacci Extension levels (drawn in blue), priced at $3,569 and $3,508 respectively.
We can see that the $3,569 level had provided significant support for the market during January 2019 and is expected to provide strong support moving forward.
If the sellers break below the $3,508 level, there is more support beneath located at the short-term .786 Fibonacci Retracement level (drawn in green) priced at $3,467. This is followed by strong support at the short-term downside 1.618 Fibonacci Extension level (drawn in blue) priced at $3,421.
The recent comments by the SEC commissioner may have introduced a new wave of optimism into the market as previously many investors were beginning to believe that the SEC would never accept a Bitcoin ETF proposal.
Price action is now looking strong on the bullish front, and if the buyers can maintain the market above the $3,664 handle, we can expect BTC/USD to re-test the $3,802 level once again quite soon.