After a several-day period of relative stability in the cryptocurrency markets, they continued to trade with significant volatility yesterday when Bitcoin failed to hold above $4,000 for an extended period of time.
Yesterday’s drop sent most cryptocurrencies, including Bitcoin, spiraling down 10% or more, from which the markets have climbed slightly. It now appears that Bitcoin is forming fresh trading ranges that will give traders a better idea of how they can profit from volatility in the near-term.
Analyst: Bitcoin Likely to Range Between $3,550 and $4,200 in Near-Term
As discussed in previous market updates, there is a consensus amongst analysts that Bitcoin is currently caught in a wide trading range between $3,000 and $5,000, with significant support existing at the former price level and resistance at the latter price level.
Within this range however, Bitcoin is forming a much tighter trading range, which one analyst now thinks exists between $3,550 and $4,200.
In a recent note, Mati Greenspan, the senior market analyst at eToro, discussed the new range that Bitcoin is forming within the larger range, noting that within this range the cryptocurrency may see large and rapid price swings, like the one the markets saw last weekend.
“As we discussed in yesterday's update, there appear to be no specific reasons for this drop and it's more likely due to the lack of liquidity inherent in the crypto markets, possibly mixed with some large orders being placed on exchanges… As we've 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 there's a breakout of the key levels there really isn't much to write home about,” Greenspan explained.
Altcoins, Bitcoin, Experience Mixed Trading Session
At the time of writing, Bitcoin (BTC) is trading up slightly at its current price of $3,700. Bitcoin appears to have found support in the $3,600 region, which is in-line with the idea of a newly formed range existing between $3,550 and $4,200.
Ethereum (ETH) is trading down marginally at its current price of $128. ETH is currently stuck behind XRP’s market capitalization by over $400 million.
The Crypto Dog, a popular cryptocurrency analyst on Twitter, recently said that he believes that $99 would be a good price to enter a long position on ETH.
“ETH could be real cheeky and go for that gap fill at ~$99. Now that would be an entry,” he said.
XRP is currently trading up 1.56% at its current price of $0.337.
Bitcoin Cash (BCH) has dropped today, and is currently trading down nearly 2% at $132.3.
All the cryptocurrencies mentioned in this article are available to trade on covesting.io