Sideways to lower presents BTC’s most likely path

Bitcoin futures are trading unchanged to lower after hitting a high of $38,460 are currently fixed at $36,270. Bitcoin is likely to remain within its current range for the foreseeable future until a break to either side occurs. Now, support remains at $30,000 and resistance at $41,000.

The news from El Salvador announcing Bitcoin as a legal tender in the country brought the cryptocurrency off the bottom of its trading range. Still, the lack of continued upside movement in light of such a big announcement can be perceived as bearish. Although the news is fundamentally extremely bullish, the lackluster reaction reveals there is still much bearish sentiment in the market.

Another solid indicator of market sentiment that is also pointing to downside pressure is the relationship of spot pricing to futures pricing. As of 7 PM, EST spot pricing is around $36,340, within $100 of futures pricing. Earlier this week, we witnessed a brief period where spot pricing was above the future’s price. This occurrence is a sign that investors believe that the price will most likely depreciate in the future.

A break above $41,000 would still likely be a catalyst to a rally to higher pricing. However, a break below $30,000 would likely signal that a drop to as low as $20,000 was imminent. With both possibilities still very much on the table, the bearish case seems at this moment to be more likely than the bullish scenario, with continued sideways action inside its current range likely to remain the route of least resistance.