After breaking $4,000 support, Bitcoin plunged again, finally finding ample liquidity in the low 3000s where many buy orders were filled. For most of the past two weeks, Bitcoin has consolidated on decreasing volume.
Following this sell off, bulls managed to push the price to a high of $4500 before slouching to the middle of the range. We now can clearly define this range between $3500 and $4500, similar to our previous range in the $6,000s.
In our last market watch, we cited the $4000-4500 block as a strong support based on volume traded in this range in 2017. Now that we have fallen below, it acts as a strong resistance.
A consolidation event following a strong move is more likely to result in a continuation than reversal. That means currently the bears are in control. However, if bulls muster a rally then we look to the range high for a break above $4500. From here, there is just one moderate resistance to take into account at $4800 before we see a large volume gap up towards $5400.
Looking to the downside, it is possible buyers step in between $3400-3500 as they did last week to hold this range low, similar to how we saw $6,000 hold time and time again. However, a resounding break below $3500 and we target the next two major supports at $2800 & 3000.
To investors looking for a signal in all the noise:
It is our opinion that Bitcoin is in the final stages of this bear market. We expect the price to range between an absolute low of $1800 to an absolute high of $6,200 (more likely, $3000-5400) for a substantial period of time. There is no reason to expect Bitcoin to rapidly enter a bull market from the bottom, it will take time. This time presents an incredible opportunity to begin to average into a position for the next bull cycle. There is no rush to buy all of your Bitcoin this very moment, but today IS a great time to begin accumulating Bitcoin as a long term investment. We look to mid 2019 and the 2020 halvening as a fundamental catalyst for further bullish momentum.