While the Bitcoin price has gained notoriety for impulsive moves in either direction, it actually spends most of its time trading inside ranges.
Trading inside a range means that the price of an asset trades within the confines of a set resistance and support.
For Bitcoin, this has been especially true since the beginning of October — since the price has fluctuated roughly 10 percent.
Crypto trader @filbfilb stated that, after the October 9 pump, the Bitcoin price has fallen back inside its previous trading range.
61.8% sniped last night after being held down by the 200 DMA.
Back into the range; really need to hold this level before another attempt. pic.twitter.com/jGJypVugzK
— f i l ₿ f i l ₿ (@filbfilb) October 14, 2019
In the tweet, Filbfilb also mentioned the 61.8 percent level and the 200DMA.
Let’s look at what these mean and discuss the current trading range for Bitcoin.
Current Bitcoin Price Trading Range
While the exact numbers vary slightly depending on the exchange, the resistance and support lines are at $8450 and $7750, respectively.
Bitcoin also broke out above this range on October 10, before coming back the next day. A breakout in which the price fails to hold the post-breakout levels often indicates that further price decreases are in store.
61.8 percent refers to the 0.618 Fibonacci level, measuring from the $7750 low to the $8850 high, which was reached after the failed breakout above the channel. It is a very common retracement level in both upward and downward moves.
We can see that, as soon as the Bitcoin price reached it, it created a long lower wick — indicative of buying pressure.
200-Day Moving Average
The 200-day moving average has been influential in offering resistance and support to the Bitcoin price.
During the September 24 crash, the BTC price fell below it. It has not traded above it since.
Notably, the Bitcoin price made unsuccessful attempts at doing so on October 1 and 10. Most recently, on October 10, it made what resembles a double top before falling inside this channel.
As for where it will go next, we believe that Bitcoin is likely to trade without significant volatility until the end of the year.
This is especially true as it regards the possibility of a significant upward movement. We discussed these scenarios in detail in our long-term Bitcoin prediction.
Do you think Bitcoin will move out of this trading range? Will it do so with an upward or downward movement? Let us know your thoughts in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.