has struggled to push on since printing a fresh high on inauguration day of around 109356. Since then the world’s largest cryptocurrency has been struggling to kick on with profit taking and caution likely to be the major factors.
There has been some positive news for the crypto industry under the new US administration. President Donald Trump chose Mark Uyeda, a Republican, to be the temporary head of the Securities and Exchange Commission. Uyeda will probably be the acting chair until Trump’s pick, Paul Atkins, is confirmed by the Senate to replace Gensler.
Both Ueda and President Trump’s pick Paul Atkins have both advocated for a business friendly approach to crypto and are seen as positive for the industry. The Securities and Exchange Commission followed this with an announcement that acting Chair Mark Uyeda has started a “crypto task force” to create clear rules for crypto assets.
Despite many of these positive developments from Tuesday onward, Bitcoin has failed to prin a new high. It begs the question, is the bull run over or what will the next catalyst be?
Source: TradingView (click to enlarge)
FOMC Meeting to Serve as the Catalyst?
Now that Donald Trump has taken his seat at the White House and most of the immediate crypto appointments out of the way, markets will likely shift attention to next week’s Federal Reserve meeting.
Monetary policy remains a hot topic and as we have seen in the past, lower rates do tend to help cryptomarkets as a whole. Lower rates usually means more disposable income especially for the retail crowd.
However, as things stand, the Fed are likely to maintain a slightly hawkish stance at the upcoming FOMC on January 29. The tariff proposals by President Trump that may start on February 1 coupled with encouraging data of late is likely to see the Fed remain cautious.
This may not bode particularly well for Bitcoin as higher rates means less disposable income and higher yields from traditional investments, like savings etc. which could be another challenge for crypto prices.
Volatility Measures Hint at the Potential for a Major Move
Glassnode’s recent on-chain weekly report has shed light on interesting developments around the recent Bitcoin price action and what it could mean. According to the data, both on-chain models and the narrow 60-day price range show a strong connection, helping investors anticipate periods of increased volatility.
By looking at the percentage difference between the highest and lowest prices over the last 60 days, we can track market volatility. The chart below shows times when the 60-day price range was tighter than it is now. These instances often happened before major volatility spikes, usually at the start of bull markets or before big drops in bear markets.
Source: Glassnode (click to enlarge)
Based on this chart, one could say that a major move is incoming. The Fed are scheduled to remain somewhat hawkish coupled with the news above and we could be in for a breakout which could favor the downside. Opposition to this could come if we do have any other crypto related posts from US President Donald Trump, which could see a rise in positive sentiment once more.
ETF Flows Remain Positive
Bitcoin ETF flows were strong in the days leading up to January 20 and have stayed strong since. This steady flow of money shows that investors are increasingly confident and interested in Bitcoin ETFs, indicating a positive outlook as the year progresses.
However despite flows of around $802 million on January 21 and $248.7 million yesterday Bitcoin continued its descent toward the 100k mark once more.
Source: Farside Investors (click to enlarge)
Looking at all the elements discussed above, there is a strong chance that the range between 100000 and 109356 remains intact over the coming days. The longer prices continue to coil in such a manner the more likely it is that an aggressive breakout will occur. The direction for now though remains up in the air.
There is another school of thought which may be key as well. Bitcoin has in many cases of late been seen as a hedge of sorts against uncertainty, almost a ‘digital gold’ if you will. Thus with more and more announcements by President Donald Trump and uncertainties increasing, this could work in Bitcoins favor and propel the Crypto to fresh highs. Something worth bearing in mind moving forward.
Technical Analysis BTC/USD
Bitcoin () from a technical standpoint on the daily timeframe sees price stuck in the range between the psychological 100000 handle and the all-time highs around 109356.
We have been noticing quite a bit of whipsaw price action within the range with today’s price action being a prime example. Bitcoin hit a daily low around 101233 before bouncing aggressively to a daily high of 106848, a daily range of around $5000.
The daily timeframe being as messy as it is means a visit of a lower timeframe like the two-hour chart may be necessary.
Source: TradingView.com (click to enlarge)
Dropping down to a H2 chart and as you can see below price action has also been messy with a series of lower highs and higher lows sending contradictory messaging.
We have had a breakout of the symmetrical triangle pattern in play on the H2 timeframe. Such a move should in theory lead to a rally to the upside.
The triangle mouth measures around $10,000 which would mean a rally of around $10,000 to the upside which could see Bitcoin prices reach the 115000 mark should the pattern play out.
However, with so many narratives at play there is no guarantee that such a move will play out.
Currently price is pulling back on the H2 timeframe, with immediate support provided by the 50 and 100-day MAs resting at 104062 and 103054 respectively. A break below this could open a retest of the 100000 handle.
Alternatively, should bulls take charge, immediate resistance rests at the 105000 handle before the swing high at 107000 comes into focus.
Source: TradingView.com (click to enlarge)
Support
Resistance
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