The dismal consolidation of Bitcoin continues for the second month. The cryptocurrency is moving in a narrow range of $19k–$20k with sluggish and unsuccessful attempts to break through the fluctuation corridor. At the same time, the volatility of the asset reached a local low, which complicates the process of impulse breakdown of support and resistance levels.
Fundamental Positive for Bitcoin
Despite the monotonous dynamics of Bitcoin's movement, positive signals are gradually emerging that may indicate the appearance of a bullish impulse. Analysts at Glassnode reported that about 66.1% of BTC have not moved for more than a year.
The number of BTC coins that have moved over the past six months has reached a minimum at around 18.12%. There has been an influx of funds into Bitcoin funds in the amount of $8 million last week. CryptoQuant also reports that the active sale of BTC by miners stopped a month ago and the pressure on the price has fallen.
In the current market conditions, the combination of positive news about the fundamental strength of Bitcoin allowed the asset to hold the level of $19k. At the same time, these positive signals did not provoke an increase in consumer activity, but became only distant signs of the coming bullish trend.
We have already noted that large amounts of liquidity are concentrated below the $17.6k–$18k level, where the local bottom area runs. Knocking out liquidity volumes with a parallel update of the local bottom may be the next target for Bitcoin in the current bear market.
Bearish Fractal of 2018
This is hinted at by the fractal for the period May–December 2018, when the support level was repeatedly tested in consolidation and was broken in a downward direction. In 2018, the price collapsed by 50% and updated the local bottom after a downward breakdown of a long-term consolidation.
When implementing a similar fractal in 2022, Bitcoin risks updating the local bottom near the $10k level. On the one hand, it is obvious that the market will want to collect liquidity below $17.6k. At the same time, leading analysts are confident that Bitcoin is in the final stage of a bear market. Given this, we will most likely see a $17k level spike and subsequent activation of buyers.
BTC/USD Short-term analysis
Over the past month, Bitcoin has significantly reduced the level of volatility and actually froze in one place. Any price changes in the range of 5%–6% do not play a key role in the price movement due to the stability of the boundaries of the fluctuation corridor.
At the same time, a decrease in the level of volatility and trading volumes indicates an active accumulation of BTC coins. Glassnode experts warn that the level of volatility in the crypto market will increase in the near future. The main BTC players have accumulated certain liquidity reserves, and will try to increase them.
In the short term, it is most likely that the flat will continue until the first serious burst of volatility. Technical metrics point to continued consolidation on the daily timeframe. However, subsequently the price can go in any direction, including through false breakouts of the channel boundaries.
There is no doubt that over a month, Bitcoin will go beyond the current range. The consolidation period took more than a month, and soon we should expect a weakening of the correlation with stock indices and the implementation of the cryptocurrency's own goals. In case of an upward movement, the final target will be the $23k–$24k range. In a downward trend, the minimum is a retest of the $17.6k level, and ideally, an update of the local bottom.
