Bitcoin (BTC) – Stuck in a narrow rangePosted on Monday, January 3 2022 at 8:43 pm GMT+0000
When trying to forecast the price of Bitcoin for this new year, it is essential to review the price action of the crypto king throughout 2021. Last year was a year full of high price volatility combined with macro consolidation and generally sideways price action.
Last year Bitcoin gained 19,000 and grew about 65% after it opened the year at 29,000 and ended it close to 48,000. It reached two major peaks, the first one at the level of 64,895 on April 14 and a second peak at the level of 69,000 on November 10 which represents the current all-time high. As a result, at current levels, Bitcoin stands 30% below its ATH.
The coin has been in a large consolidation in the 29,000 –69,000 range throughout 2021. This resembles a parallel channel with a midline at 49,000. At the same time, the market experienced high volatility as trading moved from channel resistance, through the midline, to support and vice versa.
Interestingly, the macro bottom reached during the May-July period at the 29,000 level was also where Bitcoin started the year. In contrast, the year-end close is very near the middle part of the channel, around 48,000. This indicates a constructive year-long consolidation in which high volatility went hand in hand with sideways price action.
Currently, a smaller consolidation is taking place around the middle bound of the channel between 52,000 and 29,000 a break of which will dictate the upcoming directional price wave. While a decisive break below the 45,450 support zone will increase bearish pressures towards the lower consolidation bound around 29,000, a successful move above the 52,000 ceiling will switch the outlook to a positive route in the direction of the ATH.
Every market fluctuates between a trending phase and a ranging/consolidation phase and traders should take advantage of every consolidation phase as it represents a great opportunity to trade with the direction of the new trend once it begins. And therefore, this is a great opportunity.