Bitcoin Price Analysis: BTC Continues To Consolidate As Markets Wait For Clarity

Bitcoin (BTC) remains in a consolidation phase, oscillating between $94,000 and $100,000. BTC registered a notable slump late on Monday when it fell from $96,942 to a low of $95,243 before moving to its current level of $96,280. 

A report from Bitfinex has suggested BTC continues to be macro-correlated and is showing greater maturity as a risk asset. 

Bitcoin (BTC) Volatility At Historic Lows 

Bitcoin (BTC) remains tethered between $94,000 and $100,000, with the price dropping to a low of around $95,000 on Monday, declining towards the lower boundary of the consolidating range. According to a Bitfinex report, BTC’s volatility is at historic lows, with the market remaining directionless thanks to macroeconomic sentiment and geopolitical tensions. 

“With volatility at historic lows, the market remains directionless as geopolitical tensions and macroeconomic uncertainty weigh on sentiment.”

According to the report, Bitcoin’s Inter-Exchange Flow Pulse (IFP), an indicator used to gauge market sentiment, turned bearish on Saturday, suggesting a potential downside. Meanwhile, realized losses have also increased as BTC retests lows. According to analysts, the relative weakness in Bitcoin suggests that the separation between the flagship cryptocurrency and the digital asset landscape is beginning. The analyst believes it signals a shift in investor focus as capital moves into Bitcoin instead of other cryptocurrencies, and heralds the beginning of a new market environment where altcoins go through entire cycles while BTC remains macro-correlated and shows more maturity as a risk asset. 

Traders Wait For Clarity 

A report by QCP Capital highlights that BTC is back in the middle of the range, with implied volatility continuing to drop lower. With a lack of crypto-specific price actions, price action is more dependent on macroeconomic factors, particularly with the correlation between BTC and equities remaining intact. The report adds that despite recent macroeconomic uncertainties, the crypto implied volatility and the Chicago Board Options Exchange (CBOE) Volatility Index are trading at their lows. BTC has also remained relatively unfazed by recent macroeconomic data. 

“The market remains undecided on whether it is worth paying for decay even with vols at these levels, which are reminiscent of Q2-Q3 last year when BTC struggled to break out of its multi-month range. Instead, most flows have been near-dated vol selling or trying to trade the range rather than positioning for a big breakout.”

Crypto Task Force To Focus On National Bitcoin Reserve 

The US crypto task force will focus on delivering a national Bitcoin reserve. The move could spur similar efforts in other countries, according to a research report by Bernstein. 

“A creation of a U.S. bitcoin reserve could lead to a global race amongst sovereigns to buy bitcoin as one of the reserve assets.”

According to the report, a strategic reserve poses several structural questions like whether the US Federal Reserve or the Treasury will buy Bitcoin, and if it is the Fed, would it require legislative approval? The report also questioned whether the Fed would fund crypto purchases. The report noted the US government could add the $20 billion in BTC it has seized to any national reserve. 

Bitcoin (BTC) Price Analysis 

BTC dipped below $100,000 on February 4 and has been consolidating between $94,000 and $100,000 since. Market watchers and traders are uncertain about the flagship cryptocurrency’s next move, with the price facing resistance at upper levels and unable to retake key levels. Investors are worried about a deeper correction if the price dips below $90,000. BTC could drop to $80,000 if the price slips below this level. However, analysts remain optimistic and believe BTC will have a further upside once its consolidation phase ends. One analyst believes this could be the last pullback before a surge past $250,000. A key factor behind this conviction is the fact that BTC has stayed above key support levels despite bearish sentiment and muted price action. 

BTC started the previous week on a positive note, rising 0.98% to reach an intraday high of $98,393 before settling at $97,468. However, the price fell back on Tuesday after a failed attempt to move past the 50-day SMA. As a result, BTC dropped nearly 2% and settled at $95,800. The price dropped to an intraday low of $94,118 on Wednesday as selling pressure intensified. However, it rebounded from this level to register an increase of over 2% and settled at $97,881. Sellers returned to the market on Thursday as BTC fell to an intraday low of $95,315 before settling at $96,663, a decline of just over 1%.

Source: TradingView

Buyers attempted a move past the 50-day SMA on Friday as BTC reached an intraday high of $98,929. However, it could not stay at this level and ultimately settled at $97,566 after an increase of 0.93%. Buyers retained control on Saturday as BTC registered a marginal increase and settled at $97,705. Sentiment changed on Sunday as the price dropped 1.51% to $96,225. Sellers retained control on Monday as BTC registered a marginal drop and settled at $95,767. The current session sees BTC marginally down as sellers look to drive the price below $95,000.

If BTC dips below its consolidation range, the price could drop to the psychologically important $90,000 level. A break below this level could see a deeper correction and drive the price below $80,000. Buyers will look to reclaim $96,000 in the short term and push towards $100,000. A move past this level is crucial for bullish sentiment to return. The MACD indicates a slight bearish bias after being rejected at the neutral level. The MACD is still bearish, indicating further correction.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.