The cryptocurrency market saw a huge decline in prices recently. Bitcoin prices fell by more than 15% in the past 2 weeks. The overall cryptocurrency market saw a similar drop in its market cap. This is expected as Bitcoin still has a significant dominance of around 40%. Today, BTC prices are consolidating between two psychological prices. This trend attracts day traders and lures investors into day trading instead of hodling. Is Bitcoin Price really consolidating? Should you really enter a day-trading mode? In this article, we’ll analyze what happened to Bitcoin prices so far, and try to assess whether this current trend will extend.
Bitcoin Price Fell from its All-Time High
After reaching an all-time high price of around USD 69,000, BTC prices retraced back to the mid-50K area. Many fundamental factors contributed to this decline. From a technical perspective, on the other hand, it looks like Bitcoin price simply retraced back to the average uptrend. Looking at the daily chart of BTC, we can clearly see the uptrend in prices. Smart investors wouldn’t want prices to balloon without any sign of breathers.
Is Bitcoin REALLY consolidating?
Looking at the 2-hours chart of BTC, we can spot a short-term consolidation. This is where day-traders can enter long-short positions depending on the upper and lower delimitations. Day traders can do the following:
- Buy around the 55K area
- Sell around the 60K area
The current price of Bitcoin is around USD 56,300 and around the Buy area.
On the other hand, this “consolidation” did not extend for a while and is still relatively new (more precisely, since 1 week). So traders should anticipate heavy volatility as prices pick up. Adequate risk management such as setting a stop-loss zone is very important, especially as BTC prices can still adjust lower towards the 50K price as seen in figure 1.
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