Omkar Godbole writing at CoinDesk analyses the price movements of Bitcoin(BTC) for January 18. His article was last updated at 19:25 UTC. Godbole notes that BTC has had a stretch of consolidation that is now in its eighth day. He claims that this has weakened the chances that BTC will drop to back to the December lows that were near $3,100.
During the consolidation period since January 11, BTC has been trading in a narrow range between $3,500 and $3,700. The narrow trading range is surprising in that Bitcoin had set the stage for a sharp decline toward December lows that were near $3,100 when it suffered a 9 percent drop on January 10. This was the largest single day drop since back in November 24 last year. On January 10 the price of BTC fell to $3,500 wiping out the gains won during the preceding two weeks. However, the price of BTC has been unable to make a convincing break below $3,500.
This could be a sign that sellers are unwilling to offer Bitcoin when the price is so low. As a result the probability of a drop back to the December lows is now diminished. Possibly there could be a move up to retest the $4,000 level. As Godbole’s article was posted BTC was trading at $3,620 on BitStamp.
The daily chart shows that the sharp fall of BTC on January 10 confirmed a bearish doji reversal. The relative strength index (RSI) also dropped back below 50 into bearish territory. Even so, the psychological support of $3,500 has held so far.
The hour chart shows the descending triangle breakout. This could be considered evidence of a bear failure at $3,500 and may result in a positive price action. The triangle breakout has paved the way to move up to $3,724, the neckline of the inverse head-and-shoulders pattern. A move above this level would confirm a bearish-to-bullish change in trend on the chart and possibly allow a stronger rally towards the $4,000 level.
Based on his analysis Godbole’s outlook is: “BTC’s range play likely represents bearish exhaustion. An inverse head-and-shoulders breakout, if confirmed, would open the doors to the psychological hurdle of $4,000. Acceptance below $3,500 would reinforce the primary bearish trend (downward sloping 10-week MA) and boost the probability of a drop to $3,122, although this scenario now looks less likely.”
24 hours ago BTC was trading at $3,626. Since then, it has reached a high of just $3,629 and a low of $3,578, a narrow range of just over $50. At 18:00 Central Standard Time according to CoinDesk data, BTC was trading at $3,607 a drop of less than one half a percent from the open 24 hours ago or $19. The trend so far today is for continuing consolidation with sideways movement. The present price of Bitcoin can be found here.