For a week, Bitcoin has stayed sideways – trading below 3500. The following looks at the technical side. Will price break upside or continue downside?
February 04, 2019 | AtoZ Markets – Bitcoin and the cryptocurrency market have not performed better this year so far. Though BTC currently trades above last year’s low of 3100 but the downside risks still persist. It is feared that if price should drop below 3100, the chances of dropping below 1000 is high. Besides, the current bearish market is the longest ever after price stayed on the downside for more than 400 days. Bullish enthusiasts take relief in the fact that, BTC drop from 19800 forms a corrective pattern and like it did during the previous bearish market, price should pick up again and hit another all-time-high.
While it is likely that price would return upside like it did in the previous bearish trends, times have changed now. There is so much attention on the market. A lot of investors and would-be investors are scared away. Some of the major challenges of the industry – scalability, security, fraud and regulation, are still largely unsolved. It’s normal to think that if price would return upside as some industry evangelists believed, it would take some time and we would see a gradual commitment to the upside unlike the huge spikes seen in the previous bullish trends. Perhaps individual traders should focus on short term moves. From Elliott wave perspective, price should rally soon as it stays stabilized above 3100.
BTCUSD Technical Analysis and Important Price Levels
After price completed a bullish run to 4200 from 3100, it started this year with a correction back below 3500. The 4200-to-3300 dip looks corrective. The bullish run might continue after price completed a corrective pattern as explained in the last update.The chart below shows the completed pattern.
A zigzag pattern with an ending diagonal mouth completed at 3330. A break above 3600 was expected to follow. However, price has remained below 3500 with nothing to drive it yet. Bitcoin and cryptocurrency market capitalization has stayed at $60 billion and $113 billion respectively for more than a week. For a week also, Bitcoin volume has stayed a bit above $5 billion. For the bullish run to breakout, a trigger is needed. This type of move is usually followed by a volume hike. The chart below shows the new update.
The corrective price pattern is still intact. A bullish breakout can still happen if price stays above 3300-3100 support zone. A dip below this zone would see the bearish trend continue for more days. The expected rally, if it happens, does not signify a total recovery yet, until there is a move into the 6000-7000 territory.
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