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article imageAfter moving sideways for weeks Bitcoin drops down today

By Ken Hanly     Oct 29, 2018 in Technology
After days of trading between $6,400 and $6,500 Bitcoin(BTC) finally suffered a drop of nearly $200 dollars. However, given the length of time there has been low volatility and trading within a narrow range the drop is not as large a move as was expected.
The CoinDesk analysis
Sam Ouimet posted an analysis of Bitcoin's price movements with a last update at 15:50 UTC on CoinDesk. Ouimet notes that Bitcoin finally moved to the downside after about two weeks stagnating around the $6,400 level. At 12:00 UTC the price of BTC declined by almost $200. It reached a two-week low of $6,243 by doing so.
During the last 14 days, BTC has traded sideways in the range $6,590 to$6,403. This is its least volatile period since April 2017 according to the CoinDesk Bitcoin Price Index.
Ouimet argues there is a correlation between the stock market and the price of BTC. As the markets are just about to finish their worst month since the financial crisis in 2008, he thinks that the decline in the price of Bitcoin is long overdue. Along with BTC's decline the broader bitcoin market is also dropping.
Other cryptocoins also going down
Ether, Ripple, and Bitcoin cash are also falling and are reporting losses over 24 hours of more than three percent. Litecoin is doing even worse, the worst among the top ten coins, losing more than five percent.
As the CoinDesk article went to press, the market value of all cryptocoins was down more than 3 percent to just $203 billion according to CoinMarketCap.
There are still several support levels that could stop the bears from forcing the BTC price down further.
Chart analysis
The daily chart shows that the price at the time of publishing is testing two technical obstacles. One is the symmetrical triangle and the other is the prior consolidation zone near $6,200. After a breakout the price tends to return to the trend line and test for support. This is called a backtest in technical analysis. With bitcoin trading back at $6,300, this seems to be happening. A bounce above the trendline would be a bullish sign. However, a retreat within the triangle would favor the bears.
The consolidation zone that kept up the price for five days before there was a $700 dollar rally reaching a monthly high on October 15th may offer short term support. Should it fail then there is another support just below this in the form of a four-month long upward trendline.
The CoinDesk outlook
Based on his technical analysis Ouimet's view is: "Today's break of the narrow range to the downside is a bearish development, but there are several support levels that may prevent more major drops in the near-term. A bullish backtest of the former triangle resistance is a possibility, but bulls would likely only regain short-term control above $6,493 (previous range high). Finding acceptance below the long-term rising support would set the bears up for a move towards the yearly low of $5,777."
The present situation
Bitcoin opened at $6,426 today before dropping to $6, 243 after the middle of the day. Since then it has been trading mostly sideways. It closed at $6,285. It is now October 30th UTC. At 02:15 the price was $6, 279 with BTC trading mostly sideways so far. Perhaps there will be a consolidation and then a further drop but BTC often goes counter to technical analysis. The present price of Bitcoin can be found here.
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