Bitcoin had peaked to around $4,140 on Dec. 21, then to over $4,200 on Dec. 24, but dropped sharply back to around $3,720 early yesterday, putting the bulls under pressure to regain momentum. A small bullish bounce since has now subsided and, at press time, bitcoin is changing hands at $3,762, as per CoinDesk data.

The world’s largest cryptocurrency by market capitalization now looks to be consolidating under a lower low, potentially building momentum for another push above $4,000 should buy pressure persist above two key resistance levels.

Daily chart

Given its recent price action and a revisit to intra-day support levels seen at $3,675, bitcoin looks weakened, having fallen victim to an early holiday sell-off.

Currently, it would appear that bitcoin doesn’t have the capacity to climb higher, as volume is falling with rising prices on the smaller time frames (1-hour chart, 30-min chart).

Pressure is now mounting for the bulls to make a play above $4,200 or risk conceding the short-term up-trend they had struggled hard to win.

2-hour chart

The bears will now be hoping to force prices down past the temporary support line and to close below $3,650.

The 2-hour volume bars are varied as price action continues to subside from the Dec. 24/25 sell-off, implying reactions are mixed and traders may begin to grow anxious at these levels. If so, it is likely to have another move down.

Overview:

• A short-term sell-off showed bitcoin’s temporary support lay at around $3,675 with a small bullish bounce triggered from that zone.
• Bitcoin was rejected from around $4,200 on Dec. 24/25, signalling bullish exhaustion.
• A drop below $3,650 would dash short/mid-term bullish hopes heading into the new year.