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

Bitcoin (BTC), which had fallen to $45,550 at the close of January 5, was rediscovered by analysts who waited patiently for a “squeeze”, or a new wave of volatility.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Nalyst considers the possibility of “fakedown”, which could lead to $40,000

Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD returned to levels close to $47,000 on Binance the day before.

Market participants were not disturbed by the repeated dips, and now they are looking forward to a sudden move up or down over the next few weeks. They had stated Tuesday that volatility in a period of low funding rates and record-high open interests on derivatives markets was almost a given.

“Think that we enter a volatility squeeze before the end of the month,” William Clemente, an analyst, predicted in part of comments to Bitcoin’s Bollinger Band chart.

Bollinger bands are a popular indicator that Clemente recognized as one of his “favorite tools”. They use two standard deviation bands to determine when volatility will occur around the Bitcoin spot.

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

This week’s question was however whether the move would go up or down.

Clemente said, “If we get the same setup from late June and initial pop down to the low 40s out a squeeze, I will definitely be a buyer there.”

Another post revealed the probable cause of the $45,550 plunge — a failed trader’s attempt to shorten the lows, and subsequent buyback.

Chart of Bitcoin volatility. Source: Coinglass

Red herring candles

People looking for upside also highlighted macro factors. Bitcoin has not yet fully responded to the rising inflation, which is much higher than expected.

Related: Bitcoin exchange balances return to historic lows, as BTC withdrawals resume January

QCP Capital, a trading firm, stated in its most recent update to Telegram subscribers that “view-wise we are still holding on for an upside movement in the near term.”

“An analysis of the 10-year breakeven inflation rate, which has historically had a high correlation to BTC), shows that there has been a significant divergence between end-December and now. We could see BTC playing catch-up here and moving towards 60,000.

Next week’s December consumer price index (CPI data) will be published to provide inflation cues.

“BTC has never looked so good after its bullish phase. Never, ever since its inception,” a bullish Galaxy continued Tuesday.

“It drops sharply and does not recover.”

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

He said, “We are in a consolidation prior to the next huge move to the upside.”

BTC/USD chart annotated Source: Galaxy/ Twitter

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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