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Bitcoin on the Rise, but It’s going to Be Choppy

Bitcoin suffered its first loss of the week on Wednesday, with Tuesday’s late evening fall continuing through Wednesday, to leave Bitcoin down 7.15% at $10,430 by the close.

Things could have been far worse for Bitcoin and the broader market, with Bitcoin falling to an intraday low $10,256 that tested its first 2 major support levels and reinforced the view that Bitcoin’s new found base sits closer to $10,000 than $11,000 at present.

The declines came in spite of the fact that there was no negative chatter on the crypto news wires to spook investors, with gains sub-$6,000 levels hit in early February contributing to the sell-off as investors locked in profits mid-week.

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BTC/USD 22/02/18 Hourly Chart
BTC/USD 22/02/18 Hourly Chart

At the time of writing, Bitcoin was up 2.39% to $10,699, with a run at $11,000 having been thwarted earlier in the day as Bitcoin hit an intraday high $10,935.

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Following Tuesday’s fall back to $10,000 levels that was cemented on Wednesday, we will expect there to be plenty of early resistance at $11,000, with Bitcoin’s first major resistance level sits at $11,052.

With Bitcoin having coughed up stronger gains from earlier in the day, investors will likely be wary of a possible second slide before the weekend, which could see losses exasperated. We will expect Bitcoin to have plenty of support at $10,000, with Bitcoin’s first major support level sitting at $10,032.

Looking at the Cboe Bitcoin Futures, the March contract sits at $10,810 at the time of writing, up $470 on the day, which should provide some support for Bitcoin, giving it some wriggle room before looking to make a second run at $11,000.

We’re unlikely to see one of those days where its plain sailing however and there will be some volatility through the day, largely driven by investor appetite rather than any particular news story.

We’ve seen the cryptomarket cap fall back to $472bn levels this week, having broken back through to $500bn over the weekend, with Bitcoin’s market cap falling back to $185.7bn, indicative of just how much has walked out the door and how speculative investors have been of late.

Bitcoin’s dominance levels have held at 39% plus levels this week, with none of the major cryptocurrencies having tested Bitcoin’s position at the top of the rankings.

Elsewhere across the cryptomarket, there’s plenty of positive numbers, with Ripple’s XRP leading the way, up 2.7% at the time if writing, though we have seen the cryptos move back from larger gains made earlier in the day.

While the market will be looking ahead to the weekend in hope of another Saturday rally, there is still most of today and Friday to contend with and, with the markets beginning to reverse, a fall back through to today’s intraday low $10,306.41 could, not only see Bitcoin test support levels, but also weigh on the broader market, which is still sensitive to Wednesday’s losses.

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This article was originally posted on FX Empire

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