Bitcoin Price Holds Head Above Water as Bearish Pressure Subsides
Bitcoin has declined slightly in the last 24 hours, but price action suggests that a deeper fall can be avoided for the time being as the market resumes its rangebound consolidation. Although the outlook remains firmly tilted to the downside, stable price action for the rest of the week could generate added support for the leading digital currency.
The bitcoin price touched an intraday low of $3,437.20 on Bitfinex and has since recovered near the $3,500 level. At the time of writing, BTC/USD was trading hands at $3,493.00 for a daily loss of 1.2%. The cryptocurrency was trading as high as $3,507 on HitBTC and as low as $3,389 on the U.S.-based Gemini exchange.
Aggregate data courtesy of CoinMarketCap show an average price of $3,436. Trade volumes have declined sharply in the latter half of the week, though BitMEX continued to process the largest share of transactions on virtual currency exchanges. Coinbit and CoinBene were the largest spot markets for BTC trades on Thursday, based on the latest available data.
At current values, bitcoin has a total market value of $59.9 billion; that represents nearly 55% of the overall cryptocurrency market cap.
Earlier this week, bitcoin appeared headed for new yearly lows as short sellers continued to drive price action. However, the market avoided a bigger fall mid-week, with bitcoin and its peers snapping a multi-session losing streak. For the time being, BTC/USD has found support just above $3,200 and appears poised to defend that level. As Hacked previously reported, a drop below $3,200 could generate sustained losses below the psychologically significant $3,000 region.
Narrowing price action over the past two days may signal that the end of the bottoming process is near. However, short-sellers shouldn’t be discounted given the high level of turnover on BitMEX and other futures platforms. Futures contracts allow traders to profit on declines in the bitcoin price, and there’s strong evidence to suggest that these markets have been leading the selloff over the past five weeks.
That bitcoin may be nearing the end of its bottoming cycle was recently observed by Su Zhu, the CEO of Three Arrows Capital. In his view, as shared on CCN, major exchanges like Coinbase and Bitstamp have seen strong bids for BTC at the $3,300 level. This suggests investors are already re-stocking their shelves with bitcoin following the latest bear-market downturn.
“Buy walls” at $3,300, as he calls them, are now the largest since mid-2015 on both exchanges.
This view does not negate the overwhelmingly bearish trend that has taken root in the crypto market. This trend will almost assuredly bleed over into 2019 ahead of the launch of new institutional markets for bitcoin and other cryptocurrencies.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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