Mark Dow, a trader who shorted Bitcoin (BTC) from its all-time high at $19,500 to $3,500, said that the dominant cryptocurrency could be in trouble if it does not escape the $5,000 to $6,000 range in the short-term.
Dow, who made headlines earlier this month for exiting his short position on Bitcoin, said that the asset has to break out of major resistance levels and the failure to do so could result in a further decline in value.
Although some traders expressed a positive sentiment towards the short-term trend of Bitcoin as the Bitcoin price surged to $4,300 on Christmas Eve, most analysts in the cryptocurrency space are in agreement that cryptocurrencies are still in a bear market.
The cryptocurrency market added $26 billion from $100 billion to $126 billion since early December, but it still has to increase by at least 65 percent in valuation to reach November levels.
Still a beautiful chart. If bitcoin can’t bounce to at least $5k – $6k soon, it’s a really bad sign for the cyberbulls. And if it breaks down thru the yellow line [$3,190] at any point, even the HODLers need to GTFO.
Currently, the daily volume of the cryptocurrency market is hovering at around $15 billion, down $5 billion from the past week.
The trading activity of the cryptocurrency market peaked on Christmas Eve, but as the year’s end approaches, the volume of the market is expected to stagnate.
Bitcoin remains below the $3,800 mark and other major crypto assets like Ethereum (ETH) and Bitcoin Cash (BCH) are at risk of recording large losses against the U.S. dollar, having already lost two percent on the day.
On December 26, following a decline in valuation on Christmas, a cryptocurrency technical analyst suggested that the bottom of the crypto market has not been established just yet and Bitcoin could drop to $2,000 in the last phase of the bear market.
“I’m bullish until $5,400-5,700. Overall still remaining bearish. To me the meanline is the line we’ve bounced on and we still have to get towards the despair phase. – Low volume bounce (declining). Area? Around $2,000,” the trader wrote.
Until the market goes through a several-month-long consolidation period, it will be challenging to conclusively state that a bottom has been achieved by Bitcoin or by any other major cryptocurrency.
A breakout above $5,000 remains a possibility as most cryptocurrencies are demonstrating an extreme level of volatility in a low price range. But, it could continue to show volatility on the downside as the bear market subsides.
Major stock markets, cryptocurrencies, equities, and just about every asset class in the global market are showing instability and uncertainty.
In the short-term, analysts generally see cryptocurrencies increasing in price but are confident in that it could endure a big correction before the bear market comes to a halt.
Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: June 14, 2020 9:35 AM UTC