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Bitcoin’s price is trading in a sideways manner for the 12th day straight.
The leading cryptocurrency by market capitalization has been restricted largely to a narrow range of $3,700 to $3,500 since Jan. 11 – the longest and the narrowest trading range since the end of October.
The market had gone comatose in $6,500-$6,350 range in 12 days leading up to Oct. 28. On the following day, BTC had dropped to $6,208. The range breakdown, however, was short-lived with prices resuming sideways churn before falling well below the crucial support of $6,000 on Nov. 14.
The ongoing consolidation could also end with a big move to the downside, as BTC reinforced the primary bearish trend – as represented by the downward sloping 10-week moving average – with a 10 percent slide on Jan. 10.
Further, the post-breakdown move toward December lows near $3,100 could be rapid, as a prolonged period of consolidation often ends with a violent move.
As of writing, the cryptocurrency is trading at $3,515 on Bitstamp, representing a 0.40 percent drop on a 24-hour basis.
Daily chart
As seen above, BTC’s 12-day-long range play is the longest since Oct. 28.
Back then, Bollinger bands (standard deviation of +2,-2 on the 20-day moving average) were flat-lined, representing a neutral bias. As of now, Bollinger bands are reporting a bearish bias with a slight tilt to the downside.
Another major difference is that prices had consolidated around the 20-day MA in October. This time, however, the moving average is working as stiff resistance, as indicated by BTC’s failure to secure a UTC close above that MA on Jan. 19.
Weekly chart
The outlook remains bearish while BTC is held below the downward sloping 10-week moving average (MA), currently at $3,715.
The long upper shadow (spread between high and close) attached to the previous weekly candle indicates that the sell-on-rise mentality is still intact – the price bounce ran into offers.
That candle also confirmed the end of a corrective bounce from December lows signaled by the preceding bearish engulfing candle.
View
- Bitcoin’s longest stretch of price consolidation will likely end with a convincing break below $3,500 and could be followed by a re-test of the December low of $3,122.
- The bearish case would weaken if the cryptocurrency sees a UTC close above the former-support-turned resistance of the 21-day MA, currently at $3,732.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via CoinDesk archives; charts by Trading View
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