Market Update

Volatility measures for Bitcoin (BTC/USD) are being tightened. Is it time for another big move?

  • Bitcoin price has been range bound since hitting a new all-time high on opening day.
  • The upcoming Federal Open Market Committee (FOMC) meeting could act as a catalyst for the Bitcoin price.
  • Volatility metrics indicate that a major price move is imminent.
  • Bitcoin technical analysis shows a chaotic daily time frame and a breakout of the symmetrical triangle pattern on the H2 time frame.

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Bitcoin has been struggling to move forward since setting a new high on opening day at around 109,356. Since then, the world’s largest cryptocurrency has struggled to get going with profit-taking and caution likely to be the main factors.

There has been some positive news for the cryptocurrency industry under the new US administration. President Donald Trump has chosen Mark Ueda, a Republican, as interim chairman of the Securities and Exchange Commission. Ueda will likely be acting president until Trump’s pick, Paul Atkins, is confirmed by the Senate to replace Gensler.

Both Ueda and President Trump’s pick, Paul Atkins, have called for a business-friendly approach to cryptocurrencies and are seen as positive for the industry. The SEC followed this up by announcing that Acting Chairman Mark Ueda had initiated a “Cryptocurrency Task Force” to create clear rules for crypto assets.

Despite many of these positive developments from Tuesday onwards, Bitcoin failed to make a new high. It begs the question, is the uptrend over or what will be the next catalyst?

Cryptocurrency heatmap, January 23, 2025

Source: TradingView (click to enlarge)

Will the FOMC meeting be the catalyst?

Now that Donald Trump has taken his seat in the White House and most of the immediate crypto-related appointments are out, markets will likely turn their attention to next week’s Federal Reserve meeting.

Monetary policy remains a hot topic, and as we have seen in the past, lower interest rates tend to help crypto markets as a whole. Lower rates usually mean more disposable income especially for the retail crowd.

However, as things stand, the Fed will likely maintain a slightly hawkish stance at the FOMC meeting on January 29. President Trump’s tariff proposals that could begin on February 1 coupled with recent encouraging data are likely to cause the Fed to remain dovish. .

This may not bode particularly well for Bitcoin, as higher rates mean less disposable income and higher returns from traditional investments, such as savings, etc., which could pose another challenge for cryptocurrency prices.

Volatility metrics indicate the potential for a big move

Glassnode’s latest weekly on-chain report highlighted interesting developments around Bitcoin’s recent price movement and what it could mean. According to the data, both on-chain models and a narrow 60-day price range show a strong correlation, helping investors anticipate periods of increased volatility.

By looking at the percentage difference between the highest and lowest prices over the past 60 days, we can track market volatility. The chart below shows times when the 60-day price range was narrower than it is now. These conditions often occur before large spikes in volatility, usually at the beginning of bull markets or before large declines in bear markets.

Source: Glassnode (Click to enlarge)

Based on this chart, one can say that there is a big move coming. The Fed is set to remain somewhat hawkish coupled with the above news and we could see a breakout that could lead to the downside. Opposition to this could come if we have any further cryptocurrency-related posts from US President Donald Trump, which could see a rise in positive sentiment again.

ETF flows remain positive

Bitcoin ETF flows were strong in the days leading up to January 20 and have remained strong since then. This steady flow of funds shows that investors are increasingly confident and interested in Bitcoin ETFs, indicating a positive outlook as the year progresses.

However, despite inflows of around $802 million on January 21 and $248.7 million yesterday, Bitcoin continued its decline towards the 100K mark again.

Source: Farside Investors (click to enlarge)

Considering all the elements discussed above, there is a strong chance that the range between 100,000 and 109,356 will remain intact over the coming days. The longer prices continue to turn around in this way, the more likely a strong breakout will occur. Although at the moment the trend is still up in the air.

There is another school of thought that may also be fundamental. Bitcoin has been seen in many cases recently as a kind of hedge against uncertainty, or almost “digital gold” if you will. Hence, with more and more announcements from President Donald Trump and growing doubts, this could work in Bitcoin’s favor and push the cryptocurrency to new highs. Something worth keeping in mind moving forward.

Technical analysis Bitcoin/USD

Technically, Bitcoin (BTC/USD) on the daily time frame sees the price stuck in the range between the 100,000 psychological handle and all-time highs around 109,356.

We have observed a significant amount of choppy price action within the range, and today’s price action was a prime example of this. Bitcoin reached a daily low around 101,233 before bouncing back strongly to a daily high of 106,848, a daily range of around $5,000.

Since the daily time frame is chaotic, this means that visiting a lower time frame such as the 2-hour chart may be necessary.

Bitcoin (BTC/USD) daily chart, January 23, 2024

Source: TradingView.com (click to enlarge)

Going down to the H2 chart, and as you can see below, the price action was also chaotic with a series of lower highs and higher lows sending contradictory messages.

We got a breakout of the symmetrical triangle pattern on the H2 time frame. Such a move should theoretically lead to a rally to the upside.

The size of the triangle mouth is around $10,000 which means an upside of about $10,000 to the upside which could see Bitcoin prices reach the 115,000 mark if the pattern occurs.

However, with so many narratives on the table, there is no guarantee that such a move will succeed.

The price is currently falling on the H2 time frame, with immediate support provided by the 50 and 100 day moving averages at 104062 and 103054 respectively. A break below this level could lead to a retest of the 100,000 handle.

Alternatively, should the bulls take charge, immediate resistance lies at the 105,000 handle before the swing high at 107,000 comes into focus.

Bitcoin (BTC/USD) 2-hour chart (H2), January 23, 2024

Source: TradingView.com (click to enlarge)

supports

resistance

Follow Zain on Twitter/X for additional market news and insights @zvawda

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