On December 15, the crypto market was at risk of dropping below the $100 billion mark in total valuation for the first time since Aug 1, 2017. Since then, the market has slightly recovered as its valuation increased from $100 billion to $104 billion. But,…
On December 15, the crypto market was at risk of dropping below the $100 billion mark in total valuation for the first time since Aug 1, 2017.
Since then, the market has slightly recovered as its valuation increased from $100 billion to $104 billion. But, many traders and cryptocurrency technical analysts remain cautious toward the short-term trend of the asset class.
Since early December, the majority of major cryptocurrencies and small market cap tokens have consistently shown extreme volatility in a low price range, demonstrating no signs of a trend reversal or a proper bottom.
Hsaka, a cryptocurrency technical analyst, said that the price trend of Bitcoin is in no way positive and that no trend reversal can be confirmed until it breaks out of several resistance levels below $4,000.
“The numbers next to the line are the spread b/w the open and close for that day. There is nothing bullish about this chart until BTC reclaims $3,300. Your obsession to knife catch a ‘bottom’ is directly proportional to your account erosion,” the analyst said.
Digital asset trader DonAlt echoed a similar sentiment about Ethereum (ETH) as well, the third most valuable cryptocurrency in the global market behind Ripple (XRP), stating that bears will likely look for a place to enter a short position in the $80 to $90 range.
The trader said:
“If ETH makes it out of that horizontal and diagonal resistance combination, I’ll be turning into a dip buyer. For big ETH bears, this is the place to look for shorts. If this resistance fails I think we’ll go quite far. I’ll just observe and see how it does.”
Until major digital assets undergo a consolidation period of several months at a similar rate as August to October earlier this year during which Bitcoin showed the lowest level of volatility in recent years, it will be risky to call a bottom and begin accumulating.
The daily volume of Bitcoin has nearly halved from $6.5 billion, within a three-week span. The decline in the volume of the dominant cryptocurrency in a period of high volatility suggests that most digital assets are falling in price without significant sell-pressure from bears and sellers.
The volume of Bitcoin has to recover and the market has to start portraying some resistance in the tight range of $3,000 to $3,500 before a bottom can be established.
Currently, many traders and technical analysts remain cautious toward the short-term trend of Bitcoin, Ethereum, and other major crypto assets.
Outside of crypto, investors in the traditional finance sector are struggling to deal with the instability in the global financial market due to the volatility of the U.S. and Chinese stock markets.
At least for several months, it is unlikely that a new wave of investors will enter crypto from the traditional financial sector, giving the market some breathing room.
Click here for a real-time bitcoin price chart or here to review our latest crypto market coverage.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: January 24, 2020 10:49 PM UTC