Weekly Technical Overview: Bitcoin Continues Range-Bound Price Action | Possibility of A Breakout Soon?

2022/01/04 03:22:24

The Bitcoin market seems to start the new year with positive gains across the board. The gains were around the average positive percentages, and the bigger picture had no significant effect on the move as such.

To put things into perspective, BTC remained sluggish throughout December and had a bearish final week of the year – 2021. So, the positive kick-start with about 3% gains was no more than a minuscule recovery in the market.

However, basing it off on the overall move in 2021, Bitcoin certainly has closed on a bullish note – thanks to the Q1 rally and Q3 recovery. The entire market of BTC cryptocurrency is under the radar of the buyers, despite the sell-offs that came in May 2021.

And not to mention, Bitcoin also found its new all-time highs in November at around $67,500 after a wait of more than 6 months.

Bitcoin Expert Opinion

“If that is true, in some crazy way, raising interest rates could be bullish for Bitcoin.” – Anthony Pompliano on Correlation between 10-year Treasury yield and Bitcoin. Higher interest rates in 2022, according to Bitcoin bull Anthony Pompliano, may have a different influence on BTC's price than many analysts first predicted.

In a new interview with CNBC, Pompliano, the co-founder of Morgan Creek Digital, claims that BTC might be linked to an unexpected indication. The performance of the 10-year Treasury yield is used by traders to evaluate the market mood and risk appetite.

Investors choose riskier investments with higher returns; thus a growing yield indicates market confidence. A dropping yield, on the other hand, shows market caution as investors seek safety in treasury bonds.

In an effort to combat inflation, Federal Reserve officials have stated that they expect to reduce asset purchases and boost interest rates next year. Pompliano points out that if the 10-year Treasury yield and Bitcoin have a positive connection, such a strategy may potentially be good for Bitcoin.

Daily Active BTC Addresses Spike

According to crypto analytics firm Santiment, a recent increase in the number of daily active Bitcoin addresses implies that BTC's price is poised to soar higher. After nearly a month of lackluster data, the market intelligence firm tells its 120,700 Twitter followers that Bitcoin activity has perked up.

Bitcoin Higher Timeframe (Weekly) Analysis

Ever since the market took a dip in the second quarter of 2021, the evergreen uptrend of Bitcoin was put to a halt. In fact, almost every push to the north was taken down by the sellers throughout 2021.

However, the accumulation phase that took place between May and July gave massive hope to retail investors as even fundamentals turned towards bullishness.

As a consequence, the BTC market did make a major move to the upside, where it breached the most critical resistance at $40,000. This was indeed the onset of the uptrend on the Weekly timeframe picture. Soon after the first high was formed at $51k, the higher low allowed the market to make the next set of the higher high (all-time high).

Although the second impulsive push of the buyers was stronger than the previous one, the retracement, interestingly, was deeper than anticipation. In terms of the price point, the pullback began from highs of $67,500 and dropped up to $47,500.

Currently, the retracement seems to be getting weaker and weaker, as the bearish candles are shortening in size.

Bitcoin Price Chart on the Weekly Timeframe | Source: BTC/USDT

Bitcoin Lower Timeframe (Daily) Analysis

As far as the Daily timeframe of Bitcoin is concerned, the direction certainly remains unclear and unpredictable.

However, going back in November, the prices began to trend to the downside, by breaking support levels every step of the way. The most recent Support & Resistance level now holds at $53,500, with a low price at $46,000. And ever since this low was set, the market has been retracing for a month now. In other words, the market has gone range-bound with upper and lower limits – $52k and $46k, respectively.

Bitcoin Price Chart on the Daily Timeframe | Source: BTC/USDT

A breakout on either side can give an idea on the forthcoming trend in the market. On the lower timeframe, the market possesses a possibility of it breaching south, while the higher timeframe picture, on the other hand, presents a bullish picture as the market is at a potential demand zone.

With power on both sides, it is highly probable for the market to leave false breakouts, before the predominant trend takes charge. Hence, be aware of the breakout of the range to the downside, as the higher timeframe buyers could step in at any moment around the current levels.

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