In the early afternoon yesterday, Bitcoin (BTC) appeared to have finally broken through the stubborn $5,300-$5,400 resistance level.
Bitcoin’s (BTC) price rose as high as $5,440 during a short squeeze, but the euphoria was short-lived. Only two hours later, Bitcoin (BTC) dropped back to $5,300. Overnight, bearish sentiment intensified, with Bitcoin (BTC) dropping to $5,200 by midnight and below $5,100 by 6 a.m. Eastern time.
Just after 7 a.m., Bitcoin (BTC) dropped slightly below $5,000 before stabilizing, indicating that there is support at $5,000. The Bitstamp trading book depth chart suggests there is strong support at $4,800, so if the bearish trading activity deepens, Bitcoin (BTC) could go as low as $4,800.
That said, the most critical resistance level remains at $5,300-$5,400 although data from today suggests that another resistance level has developed near $5,100. Bitcoin (BTC) has climbed a bit since the morning and is now at $5,050.
Following Bitcoin’s (BTC) firm rejection from the $5,300-$5,400 resistance level, major cryptocurrencies are deep in the red, with several major cryptocurrencies down more than 10%. Litecoin (LTC) is down 10.7% and has fallen below $80, Bitcoin Cash (BCH) is down 10.6% and is now trading near $270, EOS is down 9.3%, Tron (TRX) is down 11.9%, and Bitcoin SV (BSV) is down 10%. It is notable that Litecoin (LTC), Bitcoin Cash (BCH), and EOS all have a market cap near $4.8 billion at this time and are competing for the number four spot on CoinMarketCap. At this moment, Litecoin (LTC) is number 4, but this has been changing over the course of the day.
All other major cryptocurrencies are well into the red. Ethereum (ETH) is down 7.4%, Ripple (XRP) is down 7.2%, Binance Coin (BNB) is down 4.7%, Stellar (XLM) is down 7.9%, Cardano (ADA) is down 7.3%, Monero (XMR) is down 7.2%, Dash (DASH) is down 5.4%, IOTA (MIOTA) is down 7.5%, and Dogecoin (DOGE) is down 7.8%.
After hitting a new 2019 high of $186 billion yesterday, the total crypto market cap has shed $14.5 billion and now sits at $171.5 billion. This is actually up from $169.5 billion this morning when Bitcoin (BTC) briefly dropped to $5,000.
Today is a reminder that the bear market continues despite the bullish sentiment that has dominated over the past couple of weeks. The crypto market has certainly made significant progress since the bear market lows in December and is up over 70% since then, even with today’s losses, but until the bear market really ends, down days like today will continue to happen sporadically.
Technically, a bear market is defined as when an asset drops 20% below its peak price. Since Bitcoin’s (BTC) peak price was near $20,000 in December 2017, that means to truly end the bear market Bitcoin (BTC) will have to rise above $16,000. Therefore, it will take many more months of consistent and significant gains before the bears can officially be declared to be in hibernation.