Bitcoin Range Chop Continues, But a Breakout Is Brewing Bitcoin’s price action remains confined within an 18-day range despite a recent breakdown below $116,000, signaling that a larger breakout could be on the horizon. Bitcoin sold off sharply on Wednesday following the Federal Reserve’s release of the FOMC minutes and Fed Chair Jerome Powell’s press conference, where he explained the decision not to cut interest rates. Prices rebounded on Thursday as US equities and crypto markets refocused on fundamentals and the longer-term impact of President Trump’s economic policies. Despite the sharp drop below $116,000, Bitcoin continues to trade between $115,000 and $121,000, maintaining the range it has held for the past 18 days. Data suggest that a range expansion is imminent. Analysts at Hyblock Capital described the pre- and post-FOMC price action as a liquidity hunt, noting a "classic indecision 15-minute candle with wicks on both sides as markets wavered." They highlighted the bid-ask ratio metric at 10% order book depth turning red, increasing the likelihood of price tapping a liquidation level at $115,883. Looking at the current liquidation heat map for the BTC/USDT perpetual contracts on Binance and Bybit, the liquidation zones and price range remain unchanged. Short liquidations accelerate above $120,000, while longs face liquidation risk below $115,000. Aggregate order book data (2.5% to 10% depth) from TRDR shows thickening sell walls at $121,100 and substantial bids appearing at $111,000.

Price Compression Led to Downside Range Expansion

Earlier in the week, Cointelegraph analysts pointed out that Bitcoin’s price compression and lack of aggressive leverage in futures markets indicated an impending range expansion. The narrowing Bollinger Bands and BTC trading above the 20-day moving average led many traders to anticipate an upside breakout. Although the market initially targeted downside liquidity, several positive factors remain in play. Charles Edwards, founder of Capriole Investments, noted that Bitcoin treasury buyers have increased over the past six weeks, with more than three companies purchasing Bitcoin daily. His 'treasury buys and sells' metric shows a 100:1 ratio of buyers to sellers per month. Inflows to spot Bitcoin ETFs have resumed after $285 million in outflows last week. Data from SoSoValue reveal that since July 23, spot ETFs have seen $641.3 million in total net inflows despite Bitcoin's price decline. This week’s White House crypto report and SEC chairman Paul S. Atkins’ speech on American Leadership in the Digital Finance Revolution outlined clear policy objectives prioritizing cryptocurrency sector growth in the US. While these developments may not immediately impact prices, they lay a foundation for broader adoption and signal institutional investors to increase allocations confidently.

Short-Term Outlook

If sellers continue to dominate, a price drop to absorb long liquidity between $115,000 and $111,000 seems likely. Bulls hope for a strong bid at $111,000, triggering a high-volume spike to reclaim the range above $116,000. An ideal scenario would see spot and perpetual futures cumulative volume delta (CVD) turn positive, pushing for a daily close above the $120,000 resistance.

This article is for general information purposes and does not constitute legal or investment advice. The views expressed are those of the author and do not necessarily reflect Cointelegraph’s views.

Source: Bitcoin range chop continues, but a breakout is brewing

Frequently Asked Questions (FAQ)

Bitcoin Price Action and Market Dynamics

Q: What is Bitcoin's current trading range? A: Bitcoin is currently trading within an 18-day range, between approximately $115,000 and $121,000. Q: What caused the recent sharp drop in Bitcoin's price? A: The recent sharp drop was influenced by the Federal Reserve's FOMC minutes and Fed Chair Jerome Powell's press conference, where the decision not to cut interest rates was announced. Q: What is the significance of the "liquidity hunt" described by analysts? A: A liquidity hunt refers to price movements designed to trigger liquidations of existing positions, often seen before significant market shifts. Analysts noted indecisive price action before the FOMC meeting, suggesting a potential hunt for liquidity. Q: What are the liquidation risks for Bitcoin traders? A: Short positions face liquidation risk above $120,000, while long positions are at risk below $115,000, based on current liquidation heat maps.

Factors Influencing Bitcoin's Movement

Q: What positive factors are currently supporting Bitcoin? A: Positive factors include increased Bitcoin treasury buying by companies, a resumption of inflows into spot Bitcoin ETFs, and supportive policy objectives outlined in recent White House crypto reports and SEC chairman speeches. Q: How has the adoption of spot Bitcoin ETFs impacted Bitcoin's price? A: Inflows to spot Bitcoin ETFs have resumed, indicating renewed institutional interest and potentially supporting Bitcoin's price, despite recent outflows. Q: What is the current sentiment regarding Bitcoin's future price direction? A: While short-term outlooks suggest potential downside to absorb long liquidity, the presence of strong corporate buyers and ETF inflows maintains a degree of optimism for a potential upward breakout.

Market Analysis and Future Outlook

Q: What technical indicators suggest an impending Bitcoin breakout? A: Indicators such as price compression, narrowing Bollinger Bands, and Bitcoin trading above the 20-day moving average have led many traders to anticipate a range expansion. Q: What is the short-term outlook for Bitcoin if selling pressure continues? A: If selling pressure persists, Bitcoin may drop to absorb long liquidity between $115,000 and $111,000. Q: What would be an ideal scenario for Bitcoin bulls? A: An ideal scenario would involve a strong bid at $111,000, triggering a high-volume spike to reclaim the range above $116,000, with cumulative volume delta (CVD) turning positive and closing above $120,000.

Crypto Market AI's Take

The current price action of Bitcoin, characterized by range-bound trading and consolidation, is a common precursor to significant price movements. This period of compression often indicates that market participants are accumulating positions or hedging against potential volatility. Our AI analysis tools monitor these patterns closely, identifying key support and resistance levels. The mention of corporate treasury buys and renewed ETF inflows are strong indicators of growing institutional adoption, a critical factor we track for forecasting long-term trends. For a deeper understanding of how such market dynamics are analyzed and predicted, you can explore our AI-driven crypto trading tools which leverage machine learning to identify potential breakouts and market shifts. Furthermore, understanding the underlying economic factors, such as Federal Reserve policy, is crucial, and our market analysis section provides detailed insights into how these events can influence cryptocurrency prices.

Bitcoin range chop continues, but a breakout is brewing