Bitcoin May Break From Consolidation

Following the latest speech by Federal Reserve Chairman Jerome Powell, Bitcoin surged powerfully to $65,000 and is now in a phase of consolidation. Our technical insights suggest that a breakout from this consolidation phase may be just around the corner.

Daily time frame analysis

BTCUSDT - 1 Day Time Frame

Bitcoin has not traded for an extended period between the February 2021 Pivot and $61,000 for nearly three years. The last time Bitcoin lingered around these levels was after a major crash caused by China's Bitcoin ban, where it briefly recovered and traded around these prices for just a month before entering a bear market.

However, this year’s bull market is supported by significant and bullish regulations, suggesting that the current price action may have established a strong bottom. Bitcoin may still drop to the Value Area Low (VAL), as indicated by the Fixed Range Volume Profile, or it could trade above the Point of Control (POC).

The healthiest scenario would involve Bitcoin losing volume and potentially following a similar pattern to February, as an immediate drop in the next few days could indicate a bearish failed breakout.

Alternatively, Bitcoin could continue to rise to the Value Area High (VAH) or beyond, but this could lead to overextension and a potential rejection if it fails to break above $74,000. This might occur due to insufficient market confidence or as a pre-election move.

In summary, Bitcoin might remain in this range for a few weeks as the market narratives have not yet fully developed.

15-minute time frame analysis

BTCUSD - 15 Minute Time Frame

Bitcoin recently experienced three Open Interest (OI) wipeouts, resulting in a healthy balance that could signal a bottom, highlighted by a precise touch of Friday’s Value Area High (VAH).

If Bitcoin gradually begins to trade upwards toward the highs, this could present a strong entry opportunity, targeting levels like $65,600 or $67,000 before any further shakeouts.

In the meantime, it seems unlikely that the POC will be tested in the coming days, given the current trend’s potential. While a sharper upside move on a longer timeframe could be bearish, Bitcoin might enter the $66,000-$72,000 range and consolidate there before a breakout.

Such price behavior could significantly alter Bitcoin’s market structure, potentially transforming the current downtrend into a ranging pattern.

It's crucial to note that unless Bitcoin reclaims $64,500, there remains a possibility of further downside. A failed breakout would be confirmed if the price invalidates the POC on a higher timeframe.