The Bitcoin price is sitting at $3,667 at the time of writing, this is a gain of 0.95% in the last 24 hours. Over $160 million worth of BTC were exchanged in the BTC/USD market representing a 14% share of the global daily volume. The BTC/JPY pair represents an 8% share.
Bitcoin Price Consolidation
The recent consolidation of Bitcoin’s price over the last seven days makes the probability of a drop back to the December lows of $3,100 less likely.
The leading cryptocurrency by market value has been trading in a narrow range of $3,500 to $3,700 since 11 January.
BTC had previously set looked like it was headed for a quick slide toward December lows near $3,100 with a 9 percent drop on Jan. 10 – the biggest single-day decline since 24 November. Prices fell to $3,500 that day, erasing the hard-fought gains of the preceding two weeks.
Despite the sharp bearish reversal, a convincing break below the psychological support of $3,500 has remained elusive for seven days. Therefore, the probability of a drop to December lows has diminished, courtesy of the range bound activity.
As a result, range breakout and a re-test of $4,000 is looking probable. However, as notable crypto trader DonAlt points out it may be wise to stay out of trading this setup at the moment:
“Chilling in the lower part of the current trading range after having put in a few consecutive lower highs. As long as we stay below the POC I’ll most likely stay hedged. I’m personally not interested in trading this trading range. S: ~3380 R: ~3700”
$BTC not so daily update:
Chilling in the lower part of the current trading range after having put in a few consecutive lower highs.
As long as we stay below the POC I'll most likely stay hedged.
I'm personally not interested in trading this trading range.
R: ~3700 pic.twitter.com/9Oo78Dkl8e
— DonAlt (@CryptoDonAlt) January 16, 2019
Bitcoins price range could represent bearish exhaustion
Looking at the 1-hour chart, the price of Bitcoin is in a bullish trend zone. On January 17, the bulls broke the 12-day EMA and the 26-day EMA and reached the bullish trend zone. Bitcoin reached the $3,700 price level but was retracing to a range bound movement above the EMAs.
Meanwhile, the stochastic is out of the overbought region but above the 20% range which indicates that Bitcoin is in bearish momentum and a sell signal. The MACD line and the signal line are below the zero line which indicates a sell signal.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
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