Bitcoin [BTC] continued to fluctuate within the $85k-$90k range. The leading crypto’s price action has been bearish since the 10/10 crash.
The trend was not as strongly bearish in December as downside momentum seemed to stall at the $84.5k support.
Source: BTC/USDT on TradingView
Although there was no clear trend, volatility has been sharp in recent weeks. Every attempt at the $90,000 resistance zone has been sharply rejected since December 15.
At the time of writing, Bitcoin was hovering around the $88.3k level as regional stock market indices showed a small move during the low liquidity conditions at the end of the year.
Data showed that the S&P500the SSE composite indexand the KOSPI composite index were all 0.15% or less active that day. The Nikkei 225 had a slightly larger drop of 0.37%, or 187 points, which was still small.
This indicated caution in the stock market. Combined with the Bitcoin market’s lack of demand and investor scare, it was possible that a bearish turn would culminate in a liquidation cascade.
What to expect from Bitcoin in the coming week
The low liquidity ensured that price movements will not continue to show a trend in the coming week.
Magnetic zones with dense liquidation levels will be the target of bull or bear squeezes. More of the kind of price action seen last month is expected.
This expectation would change if the $94.5k or $$85k level is breached on significant trading volume.
The spot ETF flows showed seven consecutive trading days of ETF outflows, from December 18 to 29. This finding supported the idea that demand was weak.
Bitcoin’s realized volatility has increased dramatically since October and is approaching March-April numbers. Higher values mean higher risk in the market and are measured by log returns over a fixed period.
It is not clear which way the next step will go, but one thing is clear. Price action compressed into a tight range, with quick rallies and full retracements. An explosive movement is coming.
Final thoughts
- Bitcoin price action has not yet shown a clear short-term trend, but realized volatility has increased over the past two months.
- Spot ETF outflows and prices falling below the $90,000 resistance underlined bearish dominance.