The cryptocurrency markets have dropped slightly today and are sitting just above their weekly lows. This past weekend was especially volatile for the markets, which may be partially due to the lower trading volume the markets typically experience on weekends.
The latest drop is putting Bitcoin’s current support levels at risk of being broken, which could mean that a further move into the low-$3,000 region is imminent.
Bitcoin Nears Previously Established Support Levels
At the time of writing, Bitcoin is trading down 1% at its current price of $3,565. On Saturday, BTC surged to highs of $3,720 before dropping to lows of $3,560 on Sunday.
As we have noted in previous market updates, analysts believe that Bitcoin is currently caught in a trading range between $3,550 and $4,200. This range was validated on January 13th when BTC bounced after touching the bottom of this range.
“As we've been discussing since mid-November, the current range is from $3,000 to $5,000... It seems now, that bitcoin has opened a new mini-range within that from $3,550 to approximately $4,200,” Mati Greenspan, the senior market analyst at eToro, explained in an email earlier this month.
Don Alt, a popular cryptocurrency analyst, said in a recent update that the support that exists in the $3,500 region is becoming increasingly weak each time BTC revisits it, which could mean that it will soon break, opening the gates for further loses into the low-$3,000s. “$BTC update: Perfectly responded to the drawn level. 3500 has acted as support 3 times already if it is hit another time I'd expect it to break. Finally approaching a level (3400) that I might trade again. Until then still sitting tight fully hedged,” he said.
Altcoins Drop Slightly
At the time of writing, XRP is trading down 1.2% at its current price of $0.317. XRP has previously found some levels of buying pressure at this price, but it will not be validated as a level of strong support unless the cryptocurrency quickly rallies after trading at these levels for a short amount of time.
Ethereum (ETH) is one of today’s worst performing cryptocurrencies, as it is trading down 1.6% at its current price of $116.6. ETH is sitting at its weekly lows, and it is unclear whether or not they will hold as levels of support.
Litecoin (LTC) is trading down less than 1% at its current price of $31.05. Don Alt discussed LTC’s recent price action earlier today noting that its price has held steady around its current levels. He explained,
$LTC Very clean S/R flip on LTC. Whether the level holds mostly depends on BTC. The fact that it didn't break the support while BTC dropped yesterday shows there is definitely some buying going on. If BTC drops to the next support & LTC holds again I'll be buying.