Bitcoin Reverses Gains as Bears Eye Breakdown of Major Support Level

Bitcoin swung lower on Sunday, giving back all of Saturday’s gain and setting the stage for a possible re-test of a long-term support level.

BTC/USD Update

Bitcoin’s price fell 4% to $3,596.96, where it was approaching an important long-term support. That level is located at $3,550. A successful penetration south by the bears could set the stage for a bigger drop toward new yearly lows. As a refresher, bitcoin bottomed near $3,100 last month before rebounding more than 30%.

Read: Bitcoin Approaches “GTFO” Level.

The bulk of the selloff on Sunday occurred over the span of one hour beginning around 06:30 UTC. Trading volumes have remained elevated throughout the session, with roughly $5.4 billion worth of BTC trading hands on virtual currency exchanges.

More on this story: Return to $100 Billion Awaits as Crypto Market Loses $5B in One Hour.

The leading digital currency received a boost heading into the weekend, as buyers re-emerged following a period of hesitation. Bitcoin climbed back above $3,700 on Saturday before the latest reversal took root.

Broad Market Reversal

Even with the recent decline, bitcoin’s share of the overall cryptocurrency market was little changed at 52.5%. That’s because altcoins and tokens registered bigger percentage losses, with Ethereum, bitcoin cash and EOS each falling 4.5% or more.

Alternative cryptocurrencies tend to gravitate around bitcoin, especially during bearish trends. Justified or not, bitcoin continues to be a major influence on how other assets perform. At the time of writing, the total cryptocurrency market cap was worth $119.8 billion.

Trading across all virtual assets has remained elevated over the last 24 hours, with total volumes exceeding $16.7 billion. Cryptocurrencies have seen a substantial rise in circulation over the past three months as long-dormant accounts became active once again.

In less than one month, cryptoassets will enter its longest bear market in history, according to CNBC’s Ran NeuNer. As of Sunday, the bear market has stretched on for 394 days. The longest on record was seen back in 2014-15 when the bear trend lasted for 420 days.

2019 could be a year of accumulation for bitcoin, as long-term holders and institutional investors look to capitalize on low prices. As we recently speculated, bitcoin will likely prove to be an attractive investment in the $2,000-$4,000 range. The current hesitation reflects uncertainty about whether the market has reached a definitive bottom.

Read: Bitcoin’s Year of Accumulation.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi