On December 15, the Bitcoin price dropped to a new yearly low at $3,122, following a two-week sell-off from mid-November.
The intense sell-off the cryptocurrency market occurred on January 10 has led the price of BTC to drop below the $3,600 mark, which may put an end to the corrective rally the market has been engaging in since December 17.
Prior to Bitcoin’s fall below the $3,600 mark, Alex Krüger, a cryptocurrency trader and global markets analyst, said that a potential fall below $3,600 could result in the price of BTC dropping to a low range between $3,000 and $3,500,
What a majestic dump. BTC back to my buying area of 3500-3600. Below $3,300 exit and reassess. I’d like to see BTC ending the day above $3,700. Consolidation below $3,600 (bottom of prior area) would tilt the balance towards further downside.
A cryptocurrency trader with an online alias “The Crypto Dog” echoed the sentiment of Krüger, noting that new lows for Bitcoin are on the horizon and that investors should not be surprised to see the downward movement of BTC intensifying in the short-term.
“Not setting heavy bids but I would like to see BTC at $3,400 and ETH at $115. No reaction there and I think new lows are on the table. Nothing to stress about, all par for the course, cycles matter, long Bitcoin (without leverage) and continue shorting the banks they’re rekt,” the trader explained.
In the past 48 hours, the crypto market lost over $16 billion in valuation as the daily volume of crypto assets surged from $15 billion to $23 billion, primarily due to increasing sell volumes and sell pressure on low liquidity assets.
Cryptocurrencies with low market caps and low volumes have generally recorded substantially larger drops than Bitcoin and Ethereum throughout the past week.
Cardano (ADA), Stratis (STRAT), ICON (ICX), and Bitcoin Cash (BCH) have been the worst performing digital assets on the day, with Cardano recording a loss of over 19 percent against the U.S. dollar.
While Cardano and Bitcoin Cash have relatively high daily volumes in the range of $80 million to $350 million, tokens are currently showing a volume of less than $10 million on average, leaving them vulnerable to sell-offs in the short-term.
Bitcoin could engage in a corrective rally following a large decline in price but it is evident that crypto winter is in full effect and crypto assets are demonstrating wild volatility in a low price range.
The dominant cryptocurrency showed virtually no signs of a major trend reversal throughout December and January, struggling to recover beyond the $4,000 region. As such. BTC is expected to remain volatile in the $3,000 to $4,000 range in the foreseeable future, as low market cap crypto assets struggle to deal with intensifying sell pressure.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: August 2, 2020 11:05 AM UTC