Bitcoin Price Still Vulnerable to Pullback as Trade Volumes Drop; Long-Term Support Intact

Bitcoin’s short-term outlook has deteriorated this week following a prolonged period of lateral moves. The leading digital currency remains locked in a downtrend with trade volumes showing a gradual decline in investor interest.

BTC/USD Update

Bitcoin’s trading range narrowed significantly on Wednesday. At the time of writing, the digital currency’s daily peak-to-trough amounted to just $10, according to Bitfinex. Bitcoin currently sits at $6,328.

As we’ve seen before, prolonged periods of lateral moves often lead to significant breakdowns in the bitcoin price. That was recently on display as prices fell toward $6,200 following two weeks of virtually lateral moves. The recent range breakdown suggests BTC may face additional short-term hurdles.

Looking at the hourly chart, bitcoin exhibits weak underlying momentum, as expressed by the Relative Strength Index (RSI). Price action is also weak, with current values hovering well below the 50-period moving average.

Trade volumes over the last 24 hours have fallen nearly 10% to $3.8 billion, according to CoinMarketCap.

At current values, bitcoin has a total market capitalization of $109.9 billion, which represents 54.2% of the entire crypto asset class. Bitcoin’s dominance rate has actually increased this week as altcoins and tokens continued to shed market cap.

Presently, the cryptocurrency market is valued at $203 billion. Daily turnover across all assets hit $10.5 billion, based on latest available data.

Long-Term Support Still Intact

Despite the recent skid, bitcoin continues to trade well above the all-important $6,000 support zone. This region is significant not only for psychological reasons, but for the fundamental fact that miners break-even at this rate. As such, the market has a vested interest in keeping BTC elevated above this level.

In other news, October officially marks bitcoin’s ten-year anniversary – rounding out a tumultuous but exciting period for the cryptocurrency. From the pages of an obscure and esoteric whitepaper penned by an unknown author to the forefront of digital revolution, bitcoin has transformed the market’s concept of value. In doing so, it has slowly decoupled from the criminal elements that were once synonymous with cryptocurrency.

Despite the yearlong bear market, bitcoin has emerged with stronger institutional support and more predictable price patterns than at any other time in recent history. For the first time, bitcoin’s volatility is setting a firm trend downwards as the market continues to mature.

Over the past 30 days, bitcoin’s daily open price has fluctuated by just 1.45%, according to bitvol.info. This bitcoin volatility index shows a reading of 2.61% over the past 120 days.

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.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi