For over a week, Bitcoin has remained relatively stable in the $6,400 to $6,600 range, struggling to sustain its daily trading volume across major crypto exchanges. Within the past 48 hours, the volume of Bitcoin has declined from $4 billion to $3.2 billion on Coinmarketcap…
For over a week, Bitcoin has remained relatively stable in the $6,400 to $6,600 range, struggling to sustain its daily trading volume across major crypto exchanges.
Within the past 48 hours, the volume of Bitcoin has declined from $4 billion to $3.2 billion on Coinmarketcap and from $2.6 billion to $2 billion on CoinCap.io, the cryptocurrency market data provider of popular digital asset exchange ShapeShift.
Overall, Bitcoin has lost around 20 to 30 percent of its volume in the past two days, which has prevented the cryptocurrency market from initiating a large movement on the upside.
Given the low volume of Bitcoin and the weakening $6,500 support, in the short-term, it is highly likely for BTC to record a minor decline in value based on technical indicators and its price trend since mid-September.
However, the stability of Bitcoin and the unpredictable nature of the digital asset leaves a breakout of the $6,800 resistance level still a possibility.
Some traders in the cryptocurrency community have started to place long-term long positions. But, as widely recognized technical analyst CryptoYoda explained, it is still risky at this phase of the market to enter a long position.
“Early entry long BTC in anticipation of trendline break and leaving $6,000 area for good as support has proven to be respected. Two higher lows, proximity of important trendline and triggered bullish outside bar in favor of positive advance. Risky trade as early, worth the risk in my opinion,” he said.
Don Alt, another prominent cryptocurrency trader, emphasized that the market still remains biased to bears, but the possibility of a breakout cannot be dismissed. He noted:
“Right at both daily and H4 resistance. That said we did nuke some good levels & are holding strong so far. Invalidation of the bear case is a 4H close through resistance. Until then I favor the bears over the bulls.”
Although the volume of BTC has declined substantially in a short period of time, historically, BTC has tended to see a drop in volume and months of stability in a low price range prior to initiating a large rally, as seen in 2012, 2014, and 2016.
As of current, the price trend of Bitcoin is not favorable for traders looking to enter short-term long contracts. But, in consideration of the positive developments the cryptocurrency industry has demonstrated in the past three months, bulls should still have a positive outlook on the mid-term trend of the market.
In August, several analysts predicted the price of Bitcoin to achieve $8,000 to $9,000 by the end of October. With Bakkt, Coinbase Custody and major financial institutions serving investors in the market, traders remain confident in the next rally of leading cryptocurrencies.
If the volume of the market does not recover however in the next 24 to 48 hours, stability in the upcoming months should be expected.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: January 24, 2020 10:59 PM UTC