Following yesterday’s market surge that sent the cryptocurrency markets up from their recently established lows, Bitcoin appears to have found stability above the $3,500 region but could face significant resistance at $3,600.
Bitcoin Stable Above $3,500
At the time of writing Bitcoin (BTC) is trading flat at its current price of $3,560, up significantly from its recent lows of $3,200 which were set last Friday. Although BTC is trading up 10% from its 2018 low, it faces resistance at $3,600 and has been rejected at this price point on multiple occasions since rallying yesterday.
As discussed in yesterday’s Market Update, traders looking to enter long positions following the recent market pump should look towards the $3,200 region as a stop-loss level, as Bitcoin has responded bullishly on the occasions that it touched this price region.
In a recent interview with Forbes, Jon Pearlstone, the publisher of the CryptoPatterns newsletter, said that the $3,000 price point previously acted as resistance for Bitcoin prior to the 2017 parabolic bull run.
“After threatening to drop below support at the $3000 level twice, for the first time in two weeks, Bitcoin showed a strong move higher with solid volume… This level acted as a strong resistance during the bull run of 2017 and it took about two months to break it back then,” he explained.
Although the market’s recent surge has certainly been a positive development for investors who have been disheartened by the persisting downwards trend, Pearlstone further noted that the markets have a long way to go before they reverse the bear trend, and that in the future, investors should watch for a few key indicators that the markets have bottomed.
“The indicators to watch for now are 1) Follow through — everyone sees today’s buying and increased volume. Are there buyers willing to join the party now and keep price above $3500? and 2) Hit bullish targets — will buyers join in and take price up to test first level resistance at $4250 or the 2018 trend line currently at the $5000 level?” Pearlstone explained, adding that it's best to be cautious while trying to trade these moves.
Altcoins Maintain Yesterday’s Gains
Bitcoin’s current stability above $3,500 has allowed the general altcoin markets to maintain most of yesterday’s gains, with EOS and Bitcoin Cash being two of today’s best performing cryptocurrencies.
At the time of writing, EOS is trading up 5.5% at its current price of $2.52, up from its 7-day lows by nearly 42%. Following its recent price jump, EOS appears to have found support at $2.5, bouncing slightly each time this price level is touched.
Bitcoin Cash (BCH) is currently trading up nearly 10% at its current price of approximately $100. BCH has recovered slightly from its recently established all-time-low of $75, which was set on December 15th.
XRP has stabilized above $0.33 and is trading up 2% at its current price of $0.332. XRP responded bullishly to the $0.28 price level, which will likely act as support if the markets experience another bout of selling pressure.