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article imageBitcoin breaks through $3,600 briefly but still no clear trend

By Ken Hanly     Jan 22, 2019 in Technology
Bitcoin managed to break through the $3,600 level briefly today as a high but also went over $50 below the $3,500 level as a low. It still appears to be consolidating rather than indicating a clear move either up or down but today it is more volatile.
CoinDesk analysis
Omkar Godbole issued his usual daily analysis of the price movements of Bitcoin (BTC) on CoinDesk. The article was last updated at 11:13 UTC. He notes that BTC has seen the longest stretch of range-bound activity in the last three months. Bitcoin has largely been trading between $3,700 and $3,500 since January 11, this is the longest stretch in trading within such a narrow range since last year at the end of October.
After that period, when the price range was between $6,500 and $6,350 in the 12 days up to October 28, the next day BTC fell to $6,208. After moving sideways for period it ended up breaking through the $6,000 support level on November 14.
Godbole thinks that the current consolidation period may also end in a downside move reinforcing the already bearish trend represented by the descending 10-week moving average already indicated by a 10 percent drop on January 10. He believes the drop towards the December lows near $3,100 could be rapid since a long period of consolidation often results in a violent move. As Godbole's article went to press, BTC was trading on Bitstamp at $3,515 a drop of 0.40 percent on a 24 hour basis.
Chart analysis
The daily chart shows BTC's 12-day consolidation within a narrow range to be the longest since October 28. Back then Bollinger bands were flat-lined showing no bias. However, present Bollinger bands are slightly bearish indicating the path of least resistance is to the downside.
Another difference is that the prices in October were consolidating around the 20-day MA. However this time the moving average is functioning as a resistance that BTC has been unable to break through at the close on January 19.
On the weekly chart the outlook continues to look bearish as BTC remains below $3,715 currently the 10-week moving average. The long upper shadow, that is the spread between the high and close, that was attached to the previous weekly candle shows the "sell-on-rise" attitude is still active as short rises are accompanied by fall backs. The same candle verifies that the corrective bounce from the December lows has ended, as was signaled by the earlier bearish engulfing candle.
Godbole's view
Based on his analysis Godbole believes: "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."
Present situation
24 hours ago BTC was trading at $3,513 according to CoinDesk data. Its low since then has been $3,444 but it later reached a high of $3,605. At 16:35 Central Standard Time, BTC is trading at $3,590, up $66 from its open or more than 1.8 percent. While this may be just a temporary recovery as the price is still a long ways from the resistance of $3,732 mentioned by Godbole at least it shows that so far the sharp dip suggested as likely by Godbole is not happening. The present price of BTC can be found here.
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