After an extended period of sideways trading, Bitcoin (BTC) experienced a large downwards swing yesterday that caused the cryptocurrency to break below it previously established support level in the low-$3,500 region.
Although this drop seemed significant, BTC has found support in the $3,400 region, and it is still holding steady well above its 2018 lows that are likely to act as a strong level of support if they are visited in the near-future.
Bitcoin Holds Above Support Around $3,000
Last week, Bitcoin was caught in an incredibly tight trading range between $3,550 and $3,650. Although this range was confirmed on multiple occasions by Bitcoin’s price action, analysts previously noted that in the long-term BTC is caught in a significantly wider trading range between $3,000 and $5,000, which is still a valid theory following Bitcoin’s recent volatility.
Mati Greenspan, the senior market analyst at eToro, recently discussed the macro trading range BTC is currently caught in, saying:
“There’s no need for overreaction here. Bitcoin is continuing to trade within the core area of support between $3,000 and $3,500, within the broader range of $3,000 – $5,000…”
At the time of writing, Bitcoin is trading up marginally at its current price of $3,460. After dropping yesterday, BTC found support at $3,400, from which it has climbed slightly.
During the drop yesterday, analysts had speculated that a further drop into the low-$3,000 range was imminent, as this is where the cryptocurrency would see significant buying pressure. Despite this bearish sentiment, Bitcoin appears to have found support at $3,400, which may lead to a new trading range between $3,400 and $3,500.
Analysts Generally Bearish on BTC
Analysts seem to be generally bearish on Bitcoin in its current state, as it continues facing increasing downwards pressure and has, so far, failed to post any significant bounce since dropping towards its current price levels.
In a recent tweet from popular cryptocurrency analyst Hsaka, he noted that Bitcoin is currently bearish until it is able to decisively climb above $3,500, where it currently has some resistance.
“$BTC… A move to ~3500 (red level) would be a potential bearish S/R flip. Holding a HTF bearish bias until that level is reclaimed,” Hsaka explained.
A move to ~3500 (red level) would be a potential bearish S/R flip.
Holding a HTF bearish bias until that level is reclaimed. pic.twitter.com/fQlJSEZAKx
— Hsaka (@HsakaTrades) January 29, 2019
While looking at the cryptocurrency’s price action on a wider scale, Moon Overlord, another popular cryptocurrency analyst on Twitter, told his nearly-40k followers that Bitcoin failed to establish any major levels of support during its parabolic climb in late-2017, which makes it difficult to find good levels to start buying.
“I don’t know what the plan for $BTC on the monthly is, where would you even set bids or start buying. It went up so quickly it didn’t build a single support on the way up,” he explained.
I don't know what the plan for $BTC on the monthly is, where would you even set bids or start buying.
It went up so quickly it didn't build a single support on the way up. pic.twitter.com/NfEjnDdRaG
— moon (@MoonOverlord) January 29, 2019
If BTC visits the low-$3,000 region in the near future and fails to bounce, it could ultimately lead to further losses into the $2,000 region.
Featured image from Shutterstock.