Bitcoin price analysis: BTC/USD close to another massive sell-off

BTC/USD is sitting in a tight range, mostly unchanged since this time on Thursday. The market is frustrated by the low trading activity. However, once the market starts moving, the price fluctuations can be violent.

The cryptocurrency market has been suspiciously quiet lately with the best-known coin trading in a tight range for over a week. However, according to the director and co-founder of Global Block David Thomas, there is a high probability of another leg down with the aim at $3,100. 

“An inability of BTC to remain above the 21-day moving average means that a sustained break of the $3,500 level remains high which would then put the December lows of $3,100 firmly back on the map and give the bears back control,” he wrote.

However, the expert notes that long and medium-term sentiments are positive, but BTC is not out of the woods yet. Basically, he shares the opinion that the price will retest lows before the recovery starts for real.

Bitcoin’s technical picture

While the initial resistance lies with $3,600, a move higher will not guarantee sustainable growth for BTC. The next hurdle, created by DMA50 at $3,660 might limit the upside and trigger a short-term correction. If this area is cleared, BTC/USD may extend the recovery towards $3,700. From the longer term point of view, $4,000-$4,200 area is critical. It includes 23.6% Fibo retracement level for the downside move from November 7 high at $6,584 to December 15 low at $3,126.

On the downside, a move under $3,500 will increase the selling pressure. Considering that there is little in terms of support levels until $3,126, the downside may be the path of least resistance at this stage.
BTC/USD, 1-day chart