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Bitcoin Price Fails to Record Big Breakout But Market Remains Bull-Friendly

Last Updated March 4, 2021 3:47 PM
Joseph Young
Last Updated March 4, 2021 3:47 PM

Over the past 24 hours, despite the promising price movement of Bitcoin from low $6,500 to $6,600, BTC has fallen back down below the $6,600 mark.

Traders have offered contrasting viewpoints throughout the past two days. Some have said that the low volume of Bitcoin is a concern for the market while several stated that the sell pressure on the digital asset has declined, which may allow BTC to increase in value in the days to come.

Both Bears and Bulls are on Equal Playing Field

Based on technical indicators alone, Bitcoin is more exposed to bears than bulls. The market is not demonstrating oversold conditions but the low volume leaves the cryptocurrency vulnerable to movements on the downside.

In contrast, for the bulls, there are significantly positive developments in the cryptocurrency sector, especially on institutionalization and strengthening of the cryptocurrency exchange market.

Don Alt, a respected cryptocurrency trader, said:

β€œThe next big move will be so incredibly obvious in hindsight. Bulls have: 1) BAKKT coming 2) Increased legislative & institutional interest 3) Lows holding strong Bears have: I) Weakening 6k support II) Sell off stronger than rallies III) Missing final shakeout.”

Cryptocurrency exchanges are also in a phase of rapid and exponential development. Coinbase is reportedly on the verge of finalizing a deal with Tiger Global to secure a $500 million funding round at a valuation of $8 billion.

Within a year and two months, Coinbase more than quadrupled its valuation from $1.6 billion to $8 billion, after processing hundreds of billions of dollars in crypto traders and serving 20 million users on its platform.

Based on the progress being made by Bakkt, a regulated cryptocurrency exchange operated by ICE/NYSE, Starbucks, and Microsoft, and the increasing demand for crypto from investors in the traditional finance sector, as Don Alt noted, the next big ove will be obvious in hindsight.

However, in the short-term, poor technical indicators of BTC and many major cryptocurrencies including Ripple, Bitcoin Cash and EOS could leave the crypto market vulnerable to a downtrend.

As CCN.com reported in its report on October 4, a less risky move for investors would be to wait out for the next minor movement in the cryptocurrency market, possibly until Bitcoin breaks out of a major resistance level at $6,800.

Volume is the Only Problem

Bitcoin has tended to be unpredictable with its volume in the past. In 24-hour periods, BTC demonstrated 20 to 40 percent surge in its volume.

Hence, in the short-term, it is possible for BTC to record a sudden increase in volume and surge in volume to break out of the $6,800 mark.

For both bears and bulls in the market, the price trend of the cryptocurrency exchange market remains unpredictable and as such, a sensible approach to trading in the market in the upcoming days would be to observe the market for any changes, particularly in the volume of major cryptocurrencies.

Featured Image from Shutterstock. Charts from TradingView .