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

Bitcoin
(BTC)
recovered
from
new
lows
of
$45,550
on
Jan.
5
as
analysts
waited
patiently
for
a
“squeeze”
to
trigger
fresh
volatility.


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

Analyst
weighs
prospect
of
“fakedown”
toward
$40,000

Data
from

Cointelegraph
Markets
Pro

and

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

The
repeated
dips
had
failed
to
unsettle
market
participants,
who
now
turned
to
the
prospect
of
an
abrupt
move
up
or
down
in
the
coming
weeks.
Volatility
in
a
time
of
flat
funding
rates
and
record-high
open
interest
on
derivatives
markets,
they
had
said
Tuesday,
was

all
but
a
given
.

“Think
we
enter
a
volatility
squeeze
by
end
of
the
month,”
analyst
William
Clemente
forecast
in
part
of
comments
on
Bitcoin’s
Bollinger
band
chart.

A
popular
indicator,
which
Clemente
acknowledged
as
one
of
his
“favorite”
tools,
Bollinger
bands
use
two
standard
deviation
bands
around
Bitcoin’s
spot
price
to
assess
when
volatility
is

likely
to
come
.


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

The
question
this
week,
however,
was
whether
the
move
would
be
up
or
down.

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

A
further
post
unveiled
the
likely
cause
of
the
dip
to
$45,550

a
trader’s

failed
attempt

to
short
the
lows
and
a
subsequent
buyback.


Bitcoin
volatility
index
chart.
Source:
Coinglass

Red
herring
candles

Those
looking
for
upside,
meanwhile,
highlighted
macro
factors.
Inflation,
running
hotter
than
anticipated,
had
not
been
fully
reacted
to
by
Bitcoin
yet.



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

“View-wise,
we
are
still
holding
out
for
an
upside
move
in
the
near-term,”
trading
firm
QCP
Capital

wrote

in
its
latest
update
to
Telegram
channel
subscribers.

“Looking
at
the
10-year
breakeven
inflation
rate
(which
has
historically
had
a
high
correlation
with
BTC),
there
has
been
a
material
divergence
since
end-December…
If
BTC
plays
catch
up
here
we
could
see
the
move
towards
60,000.”

Inflation
cues
are
due
next
week
with
the
publication
of
December’s
consumer
price
index
data.

“Never
once
BTC
looked
like
this
when
it
ended
its
bullish
cycle.
NEVER,
since
its
inception,”
an
even
more
bullish
Galaxy

continued

Tuesday.

“It
always
drops
sharply
without
much
recovery.”

Galaxy
was
observing
periods
of
consolidation
following
price
tops
throughout
Bitcoin’s
history,
concluding
that
the
$69,000
top
in
November
could
not
logically
form
a
multi-year
high. 

“We
are
in
a
consolidation
before
the
next
massive
move
to
the
upside,”
he
added.


BTC/USD
annotated
chart.
Source:
Galaxy/Twitter

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