Home News Bitcoin reaches for $47K as analysts agree BTC price consolidation cannot last

Bitcoin reaches for $47K as analysts agree BTC price consolidation cannot last

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As observers waited for a “squeeze” to re-ignite the market, Bitcoin (BTC) rallied back from new lows of $45,550 on Jan. 5.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Analysts estimate the value of “fakedown” at $40,000

BTC/USD was trading near $47,000 on Binance at the time of writing, returning to the previous day’s levels.

The repeated drops had failed to faze market participants, who were now anticipating a sharp up or down move in the coming weeks. They had said on Tuesday that at a time of flat funding rates and record-high open interest on futures markets, volatility was almost a guarantee.

On the Bollinger band chart of Bitcoin, expert William Clemente commented, “Think we enter a volatility squeeze before the end of the month.”

Bollinger bands, a popular indicator and one of Clemente’s “favourite” tools, use two standard deviation bands around the current Bitcoin price to forecast when volatility is likely to occur.

BTC/USD with Bollinger bands annotated chart. Source: William Clemente/ Twitter

The question this week was whether the trend will be upward or downward.

“If we have the same setup from late July and the initial pop down to the low 40s out of a squeeze, I will definitely be a buyer there,” Clemente said during a discussion on the outlook.

The following article revealed the most likely source of the $45,550 drop: a trader’s failed attempt to short the lows, which was followed by a buyback.

Bitcoin volatility index chart. Source: Coinglass

Red herring candles

Those looking for upside chances, on the other hand, have concentrated on macroeconomic challenges. Inflation has been running hotter than projected, and Bitcoin is failed to properly respond.

Bitcoin exchange balances trend back to historic lows as BTC withdrawals resume in January

“We are still holding out for an upside move in the near term,” trading firm QCP Capital said in a recent Telegram message to channel users.

“Since the end of December, there has been a significant divergence in the 10-year breakeven inflation rate. Which has historically had a strong link with BTC. If BTC catches up, we could see a spike to 60,000 “.

Next Monday, the consumer pricing index (CPI) numbers for December will be announced, providing inflation indicators.

“This is the first time BTC has looked like this near the end of a bullish cycle. There has never been a point in its history when” The Galaxy became even more positive on Tuesday.

Galaxy observed periods of consolidation after price tops throughout Bitcoin’s history and decided that the November high of $69,000 could not be deemed a multi-year high.

He went on to say, “We’re in a consolidation phase before the next huge upward surge”.

BTC/USD annotated chart. Source: Galaxy/ Twitter
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