Bitcoin (BTC) is witnessing the longest stretch of range-bound price activity in three months.

The leading cryptocurrency by market capitalization has been largely restricted to trading between $3,700 and $3,500 since Jan. 11 – the longest stretch at such a narrow range since the end of October.

Back then, the market had gone quiet, with prices staying within the $6,500–$6,350 range in the 12 days leading up to Oct. 28. On the following day, BTC dropped to $6,208. After another period of sideways movement, bitcoin fell well below the crucial support level of $6,000 on Nov. 14.

The current period of consolidation may also end with a big move to the downside, as BTC reinforced the primary bearish trend – as represented by the downward sloping 10-week moving average – with a 10 percent slide on Jan. 10.

The potential post-breakdown drop toward December lows near $3,100 could be rapid, too, as a prolonged period of consolidation often ends with a violent move.

As of writing, the cryptocurrency is trading at $3,515 on Bitstamp, representing a 0.40 percent drop on a 24-hour basis.

Daily chart

As seen above, BTC’s 12-day-long range play is the longest since Oct. 28.

Back then, Bollinger bands (standard deviation of +2,-2 on the 20-day moving average) were flat-lined, representing a neutral bias. As of now, Bollinger bands are signaling a bearish bias with a slight tilt to the downside.

Another major difference is that prices had consolidated around the 20-day MA in October. This time, however, the moving average is working as stiff resistance, as indicated by BTC’s failure to secure a UTC close above that level on Jan. 19.

Weekly chart

The outlook remains bearish while BTC is held below the downward sloping 10-week moving average (MA), currently at $3,715.

The long upper shadow (spread between high and close) attached to the previous weekly candle indicates that the “sell-on-rise” mentality is still intact, meaning the brief price bounce soon ran into offers.

That candle also confirmed the end of a corrective bounce from December lows signaled by the preceding bearish engulfing candle.

View

  • Bitcoin’s longest stretch of price consolidation will likely end with a convincing break below $3,500 and could be followed by a re-test of the December low of $3,122.
  • The bearish case would weaken if the cryptocurrency sees a UTC close above the former-support-turned resistance of the 21-day MA, currently at $3,732.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via CoinDesk archives; charts by Trading View 

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.