In the last 24 hours, the Bitcoin price has slightly recovered from $3,451 to $3,526 following the announcement of Fidelity to launch Bitcoin custody by the end of the first quarter. The valuation of the crypto market has increased by $2 billion overnight as Bitcoin (BTC), EOS (EOS), and Ethereum (ETH) rebounded in the range of one to three percent against the U.S. dollar.
While the recovery of Bitcoin prevented a further decline in price to the low $3,000 region, traders generally agree that the dominant cryptocurrency still remains vulnerable. DonAlt, a cryptocurrency technical analyst, stated that if Bitcoin fails to remain above the $3,300 to $3,500 range, it may face a quick drop to 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.
Bitcoin also could avoid a drop below the $3,000 support level if it engages in a recovery to $4,000 but based on its past performance and the lack of momentum of major crypto assets, it remains unlikely that Bitcoin initiates a strong corrective rally in the short-term without a major catalyst. A cryptocurrency trader with an online alias “Mayne” explained that the price trend of BTCis leaning towards bearish as it rejected a resistance level. Echoing the sentiment of other analysts, Mayne said that in an event that BTC fails to maintain momentum at its current level, it could drop rapidly below $3,000.
Previously, Mayne emphasized that Bitcoin could drop an additional 50 percent from the $3,500 level depending on its performance over the next few weeks. Following an 85 percent drop in the valuation of cryptocurrencies, the sentiment around cryptocurrencies is undoubtedly bearish.