In the last 24 hours, the Bitcoin price dropped from $3,874 to $3,764 by 2.8 percent, leading major crypto assets such as Ethereum and EOS to lose well over 5 percent of their value against the U.S. dollar.
The valuation of the crypto market fell by $4 billion from $130 billion to $126 billion, dropping to the $120 billion region for the first time since mid-February.
Earlier this month, one cryptocurrency analyst suggested that the longer Bitcoin remains in its tight range from $3,300 to $4,000, the higher the probability of the asset declining below key support levels gets.
Since the start of the 15-month bear market in January 2018, Bitcoin has tended to record a large drop in value following an extended period of stability.
For well over three months, BTC has barely moved out of its tight range in the $3,000 region, struggling to test crucial resistance levels above $4,200.
As such, an increasing number of traders have started to wait out and observe the short-term price movement of the crypto market before engaging in any trade.
“This is why I’m sitting out here, market is extremely undecided, rarely seen so much ‘around POC’ chop. I wouldn’t trust any move from here, could take a while until I decide myself to re-enter a position. At least none until Monday,” a Bitcoin trader said, uncertain about the near-term future of the asset.
On March 2, a cryptocurrency trader with an online alias “Hsaka” said that the weaker follow through of Ethereum has presented a better opportunity for traders at $125.
Since then, the price of Ethereum has dropped by 5 percent to $127 and is en2 route to testing a support level at $125.
“Every subsequent reaction (bounce of range low) has a weaker follow through. I’d rather long the next level down at $125 than a beaten up support,” the trader said.
Similarly, other major crypto assets such as EOS have dropped to their respective support levels, which could be crucial levels to defend in the days to come.
Although analysts remain optimistic in the mid-term price trend of crypto assets with potential catalysts like Bakkt and Fidelity on the horizon, in the near-term, analysts remain cautious on the price movements of the cryptocurrency market.
Previously, a technical analyst said that if BTC fails to remain above the mid-$3,000 region, there exists a strong possibility that the asset drops to a new yearly low in the $2,000 region.
“Sitting in the last buy zone before new lows. Cut some of my buys due to the breach of the top of the zone. Looking to re-add them if it is reclaimed. If green fails ($3,300) I expect a quick move into the $2,000s. If it holds $4,000 is on the cards,” the analyst said.
With the cryptocurrency market demonstrating indecisive movements in a tight range, traders are not ruling out any near-term possibilities.
Currently, Bitcoin is in a position wherein it could break out of $4,200 and establish newly found momentum for a short-term rally or potentially retest previous lows.
Since the release of Grayscale’s 2018 report, investors in the cryptocurrency space have questioned the lack of movement in crypto markets given the growing involvement of institutional investors.
To date, less than $500 million are said to have been invested by institutions over the last 12 months. That is less than 5 percent of the daily trading volume of the cryptocurrency exchange market.
Eventually, some investors like billionaire Mike Novogratz foresee institutions having an impact on the price trend of crypto assets but in the upcoming months, it will likely have a minimal effect on the market.
View the live bitcoin price chart here.