January 13, 2025, 9:32 AM

Bitcoin Down 8% In A Week: What Does Technical Analysis Say?

Bitcoin has dropped below key support levels recently. Traders are now predicting a period of sideways price movement for January, with hopes for a better performance in February. There are significant liquidity zones between $86,000 and $90,000, as well as at $104,000. These could lead to price swings in both directions.

Currently, Bitcoin (BTC/USD) sits at $90,717.09, down 4%. This decline aligns with historical patterns we've seen after previous halvings.

How Long Will Bitcoin's Consolidation Last?

Technical analyst Kevin points out that the 3-day price chart and the Moving Average Convergence Divergence (MACD) indicator have been reliable tools for tracking bullish trends.

Historically, MACD downside crosses often come before consolidation phases, lasting anywhere from 30 to 174 days. Kevin notes a potential cycle here: past consolidations lasted 164, 30, and 174 days. Right now, we’re at 24 days of consolidation. This suggests we might see 35 to 40 days of range-bound trading before any breakout happens.

In another tweet, Kevin highlighted the liquidity zones again. Bitcoin is facing significant blocks between $86,000 and $90,000, as well as $104,000. This indicates possible price sweeps that could create choppy trading throughout the month.

It’s wise to stay cautious until USDT dominance drops below 3.7% and Bitcoin moves above $108,000. Traders should manage risks carefully with altcoins. For long-term holders who bought during the bear market, patience and waiting for more data are key strategies.

Also Read: Bitcoin To Bounce Back In Q1 But Beware 20% Corrections, Analysts Warn

What's Next?

Adam, a well-known whale trader, has been analyzing weekend trends. He predicts we’ll see some price "chop" until the end of the month. Here are some important insights he shared:

  • CME data: Non-reportable trades are heavily short, which historically leads to rallies.
  • Seasonality: A weak January could pave the way for a strong February.
  • Spot data: Heavy sell orders and clustered open interest suggest that patience is necessary.

If you’re considering a long position, the ideal setup would involve a drop in open interest, an increase in spot demand, and alignment with a high-volume price level. While the market is trading around its point of control, staying patient is crucial. Focus on trading at extremes when the market is out of balance.