KEY POINTS

  • Bitcoin has traded sideways despite some bearish news, including the legal issue with BitMEX
  • While Bitcoin continues its sideways trend, altcoins move downward
  • An analyst said Bitcoin dropping to $9,000 would still be bullish

As Bitcoin continues to trade sideways, analysts say a further downward move, possibly to $9,100, is possible.

Bitcoin closed Tuesday at $10,627 after the market digested news of President Donald Trump delaying negotiations on the second round of fiscal stimulus. While it meant reversing the gains from the previous two days, Bitcoin actually just returned to its sideways range, which was between the $10,500 and $10,900 levels it traversed in the last 12 days.

Analyst Michael Van de Poppe said this range-bound behavior started after Bitcoin dropped from $11,200. “As long as the price of Bitcoin stays below this resistance area, it’s unlikely to expect a strong upside move,” he wrote in a report on Cointelegraph.

Volatility is a key factor that traders are observing. In the past, every time Bitcoin’s volatility dropped to its lowest, a wild move soon followed. Recently, Bitcoin’s 180-day volatility dropped to its lowest of 0.028, very close to its two-year low. Van de Poppe said when volatility starts to drain away, volume will drop off, which will result in an eventual highly volatile move.

Adding the volatility and the failure to overcome the resistance area, Van de Poppe said it is more likely to expect a breakdown. The most important support levels, he said, are the $9,500 to $9,800 and $8,800 to $9,100 regions.

If Bitcoin is able to overcome the resistance, which is at the $11,200-$11,400 levels, Van de Poppe said new highs are on the horizon.

The analyst added that even if Bitcoin went back to the $9,000 level, the outlook will still be bullish because it’s still a “higher low” within a massive bull trend. 

Nevertheless, the analyst noted, Bitcoin showed signs of defiance. Bitcoin did not react negatively despite a multitude of bearish news, including the issue regarding BitMEX and the president testing positive for COVID-19. The altcoins were on a downward slope while Bitcoin just continued trading sideways.

bitcoin A file photo of a visual representation of the digital Cryptocurrency, Bitcoin on October 23, 2017 in London, England. Photo: Dan Kitwood/Getty Images