Is Bitcoin Price Heading to Low $3,000? Traders Expect Short-Term Downtrend

Is Bitcoin Price Heading to Low $3,000? Traders Expect Short-Term Downtrend

On January 11, the crypto market experienced an intense sell-off as the Bitcoin price dropped below the $3,600 mark and major digital assets recorded drops in the range of 10 to 15 percent.

Following a drop in the price of BTC from $4,036 to $3,503, traders expect the dominant cryptocurrency to fall below key support levels in the low $3,000 region, possibly below $3,300.


Crypto Winter Not Over

In mid-December, prior to Christmas Eve, many investors in the cryptocurrency market demonstrated renewed optimism toward a short-term trend reversal of Bitcoin and other major cryptocurrencies due to the strong recovery of BTC from its 12-month low at $3,122.

From December 17 to 20, the Bitcoin price increased from $3,181 to $4,172, by more than 31 percent within a three-day span.

But, at the time, an FX hedge fund CEO Su Zhu said that buy walls on leading fiat-to-crypto exchanges in the likes of Coinbase and Bitstamp started to build up in the $3,200 to $3,300 range and investors began accumulating the asset at a low price range.

He said on December 13:

The short-term rally Bitcoin experienced from December 17 to 20 was essentially a corrective rally triggered by oversold conditions and given the lack of momentum of the asset throughout late December and early January, it was fairly evident that the probability of a proper short-term rally was low.

DonAlt, a cryptocurrency investor and technical analyst, said after BTC fell below $3,600 that a drop to $3,350 can be expected as a support level at $3,600 was cleanly breached.

Clean break of support. If we do retest $3,700 on the weekend and dont manage to close above there Im expecting $3,350. Ill most likely close my hedge short there. This is the reason why you shouldnt trust mismatched patterns its an easy way to get rekt, the trader said.

Expect Low Liquidity Assets to Underperform

As Bitcoin dropped by more than 10 percent in a 48-hour period, Ethereum, Bitcoin Cash, and other major cryptocurrencies recorded 15 percent falls against the U.S. dollar.

Ethereum, which was expected to maintain a positive upward price movement in anticipation of its Constantinople hard fork on January 14, was overtaken by Ripple.

Although the daily volume of Bitcoin and Ethereum still remain relatively high, the volume of the cryptocurrency market is hovering at $15 billion, down $7 billion since January 10.

If crypto assets continue to free fall without meaningful volume and strong sell pressure, a short-term drop should be expected.

Featured image from Shutterstock.


12.01.2019 / 04:25 28
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