Bitcoin Price Correction May Be In Final Stages
Since surpassing the $90,000 milestone on Nov. 19, the price of Bitcoin has been consolidating within a broad range of $108,268 to $91,000.
However, technical indicators and political developments suggest that this consolidation phase might be nearing its conclusion, with a potential breakout on the horizon.
Crypto analyst Rekt Capital attributes Bitcoin’s current price movement to its first price discovery correction, which may be approaching its end after the bullish daily close above $91,000 on Jan. 14.
In a Jan. 11 post on X, Rekt Capital stated that Bitcoin’s “current 15% price discovery correction has been much shallower by standards of history.”
Historically, price discovery corrections for Bitcoin typically range between 30% and 35% and last three to four weeks.
“Duration-wise, however, history suggests this current 4-week retrace may be in its final stages,” noted Rekt Capital's remark.
TradingView data shows that strong buyer activity around the $90,000 level allowed bulls to push Bitcoin from local lows of $89,100 to close above $91,000 on Jan. 13.
Rekt Capital emphasized that reclaiming the $91,000 support level is “important in dictating the next move” for Bitcoin's price.
Independent analyst Trader Tardigrade expects consolidation to persist for a few more days, leading to the “final capitulation” before a major upward move.
“Bitcoin experienced a final capitulation at the 27th bar during consolidation in January 2024, just before a massive rebound,” Trader Tardigrade noted in a Jan. 13 analysis on X.
If history repeats, the final capitulation level would occur around Jan. 13 or Jan. 14, after which, “BTC will surge with a massive rebound.”
Meanwhile, Bitcoin’s volatility indicator suggests a breakout may be imminent.
According to pseudonymous analyst Batman, the tightening Bollinger Bands on the three-day timeframe indicate the “bottom might be very close.”
“The 3D $BTC Bollinger Bandwidth is at an extremely oversold level, nearing its lower green line,” Batman shared in a Jan. 13 post on X.
The Bollinger Bands, a classic volatility indicator, are now tighter than they were when Bitcoin reached $50,000 in September 2024.
“Historically, such lows signal a local bottom,” Batman noted.
In September 2024, Bitcoin rallied 101% from $52,500 to a record high of $108,268 by Dec. 17. Similar patterns in May and February 2024 preceded 30% and 87% price increases, respectively.
If historical trends persist, Bitcoin could soon break out of consolidation, paving the way for a significant upward movement in the coming days.
Bitcoin investors are optimistic about further price increases following US President-elect Donald Trump’s inauguration on Jan. 20.
The options market has shown renewed interest, with increased activity in Bitcoin call options at $100,000 and $120,000 strikes, according to Deribit data.
For instance, a trader spent approximately $6 million on Jan. 4 to secure $100,000 strike call options expiring on March 28, as reported by Amberdata.
This reflects strong market confidence in Bitcoin's potential for further gains, particularly after Trump assumes the presidency.
The crypto market is closely monitoring Trump’s inauguration, amid speculation that he may issue pro-crypto executive orders on his first day in office.
During his campaign, Trump pledged to make the United States the “crypto capital” of the world, suggesting initiatives such as establishing a Bitcoin strategic reserve and fostering a crypto-friendly regulatory environment.
Sources:
https://cointelegraph.com/news/how-long-will-the-bitcoin-consolidation-last
https://x.com/rektcapital/status/1878062462907330862
https://www.tradingview.com/symbols/BTCUSD/
https://x.com/rektcapital/status/1878791391918055881
https://x.com/TATrader_Alan/status/1878739091287892412
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