Bitcoin and Crypto Markets Form Fresh Trading Ranges Following Recent Plunge

Following the cryptocurrency markets recent plunge that occurred when Bitcoin failed to stabilize above the $4,000 price level, the crypto markets have seen further instability, with many altcoins continuing to drop today.

Now, the markets, and Bitcoin in particular, appear to be forming fresh trading ranges that could be highly profitable for risk tolerant traders who play them correctly.

Macro: Bitcoin Likely to Range Between $3,000 and $5,000

Last weekend, Bitcoins price rapidly shot to $4,000, a price level that acted as support for several days before the bulls lost their strength and bears pushed the markets back down towards their current levels.

Although at the time $4,000 appeared to be an important price level for the cryptocurrency, one prominent analyst dismissed this notion and claimed that Bitcoin is actually caught in a wide trading range between $3,000 and $5,000, with both prices acting as important support and resistance levels.

Even though $4,000 is a nice round number it doesnt necessarily represent any sort of significant psychological level. If we zoom outwe can see that the overall range that were in is from $3,000 to $5,000 per coin, Mati Greenspan, the senior market analyst at eToro, explained in a market update earlier this week.

The latest drop appears to support this theory, and Bitcoin has respected the low-$3,000 price region as a level of support so far.

Vinny Lingham, the CEO of the blockchain identity platform Civic, recently shared a similar sentiment regarding Bitcoins potential trading range in an interview with Cheddar, noting that the crypto will likely range between $3,000 and $5,000 before either breaking out or breaking down.

The reality is itll probably trade sideways between $3,000 and $5,000 for another month or two while its trying to find which way to go When it finds that direction, therell be a breakout or a breakdown, Lingham explained.

Micro: Bitcoin Likely to Range Between $3,550 and $4,200

While looking at Bitcoins price action on a smaller time frame, Greenspan believes that Bitcoin is caught in a smaller trading range between $3,550 and $4,200 within the aforementioned larger one.

He discussed this range in todays market update, saying:

As weve been discussing since mid-November, the current range is from $3,000 to $5,000 It seems now, that bitcoin has opened a new mini-range within that from $3,550 to approximately $4,200 Movements within a range can sometimes be sudden like we saw yesterday, but unless theres a breakout of the key levels there really isnt much to write home about.

He also noted that there was nothing fundamental or technical behind the markets recent drop, except for a possible lack of liquidity which makes Bitcoins price vulnerable to large price swings.

As we discussed in yesterdays update, there appear to be no specific reasons for this drop and its more likely due to the lack of liquidity inherent in the crypto markets, possibly mixed with some large orders being placed on exchanges, he said.

Featured image from Shutterstock.

The post Bitcoin and Crypto Markets Form Fresh Trading Ranges Following Recent Plunge appeared first on NewsBTC.

11.01.2019 / 16:10 35
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