Over the last 24 hours, Bitcoin has slightly recovered from $6,230 to $6,260, unable to breakout of the $6,300 mark.
Throughout the upcoming days, if Bitcoin fails to stabilize in the $6,300 to $6,400 range, the price of BTC is at risk of dropping to the lower region of $6,000 and possibly below the $6,000 mark.
Major cryptocurrencies like Ethereum (ETH), Ripple (XRP), and Bitcoin Cash (BCH) have prevented extended losses below their low price range. But, ETH still remains below $200 and BCH is still at $416, struggling to recover from their 5 percent losses on October 30.
According to respected cryptocurrency trader DonAlt, Bitcoin will need to close above the $6,380 mark in the next 12 to 24 hours to reverse the trend and initiate a rally on the upside. The failure to do so could result in another minor movement to the $6,000 to $6,200 range, moving dangerously close to the $6,000 support level which BTC has defended relatively well since August.
“Today is the day, the bulls need to close the monthly in the 6380 region. If they don’t manage that that’d be pretty bad news. If we do, an excellent long opportunity. The safe play is waiting it out. Quick spike down into big move up would be my favorite move,” he said.
Currently, the issue with BTC is that its daily trading volume has started to drop back down to the lower region of $3 billion. On October 30, the volume of BTC across major cryptocurrency exchanges increased to $4.2 billion but most of it was composed of sell volume.
While it is possible for BTC to experience a sudden increase in volume as it has done in mid-September, the low trading activity in the cryptocurrency exchange market has made a short-term rally highly unlikely.
Hsaka, a technical analyst, said that the low volume of the dominant cryptocurrency could result in BTC remaining in the tight range of $6,300 to $6,400 throughout the next month, reflecting its trend throughout August to October.
“To be honest, with volume and volatility petering out, I wouldn’t be surprised to see BTC hold this range for another month (and maybe till the EOY too). Would be the path of maximum pain, bears don’t get their rapid selloff to 4.8k, bulls distraught over not being able to break 6.8k.”
In the short-term, it is not likely for BTC to recover back to the $6,400 to $6,500 range, due to its low volume. Based on the current trend of the market, it is more likely for Bitcoin to maintain its tight price range for the next several weeks until it builds up momentum and volume to initiate a strong rally.
If Bitcoin continues its tight range throughout November, it would be the longest period in the history of the cryptocurrency during which Bitcoin maintained its price range in a 3 percent gap for more than 4 months.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 2:35 PM UTC