Bitcoin, Volatility is Back?

As I do every week, I review the previous week’s analysis and then explain my vision for the week ahead. Let’s get started!

Disclaimer: This article is not intended as investment advice or as an inducement to invest. It is strictly for informational purposes only. You are solely responsible for the trading and investment decisions you make.

Vacation Debrief

As is often the case, the vacations and the recovery being without the professionals, these have been very quiet. We had the infamous pre-Christmas sell-off, frequently related to tax payments in the US. The year’s earnings, or at least what’s left of them for some, are used to pay for the collective participation. Then comes the break, where everyone enjoys the holidays, and so there is much less volatility during that time.

Vacation weeks on Bitcoin
Vacation weeks on Bitcoin

Bitcoin is no exception to this rule, we see that everything has been very quiet. And as predicted in the pre-Christmas column, we parked in the green zone that you see in the chart in the next part.

Now it’s time for the analysis of the week.

Analysis of the week

I may not be very bullish when I see the current movements and I apologize in advance!

Indeed, Bitcoin’s price movement leaves much to be desired, the rally has been very non-volatile, and it seems to be attacking shorts’ cash but without real volume. This absence suggests that it is a trap for buyers, especially those who will buy the pseudo bullish breakout at $17,049.6.

Zooming in on the current movement of Bitcoin. BTC/USDT Perpetual Binance
Zooming in on the current movement of Bitcoin. BTC/USDT Perpetual Binance

Indeed, if the breakout occurs without volume and immediately re-enters, leaving room for plenty of liquidity to the SOUTH (they appear in green on the right side of the chart), we are likely to have a bearish reversal. The targets would be the last two green points, $15,984.1 and $15,443.2 respectively, and yes a return below $16k!

Furthermore, the orderflow analysis of altcoins (all cryptocurrencies, excluding Bitcoin – And Ethereum on the charts I use) show nothing to be happy about. It is not uncommon to see, during moments of low volatility, altcoins perform.

Orderflow des altcoins, 1 – Prix du Bitcoin ; 2 – Open interest des Altcoins ; 3 – Funding des altcoins

However, an outperformance of altcoins with a flat Bitcoin price often goes hand in hand with a “FOMO” (=Fear Of Missing Out). This FOMO pushes people to buy altcoins with leverage, we can see it here with a rise in open interests coupled with increasing (and even positive) funding meaning that the positions that are opening up are buying positions.


So we find ourselves with a Bitcoin price that is struggling to rise, on resistance, with an accumulation of liquidity in the SOUTH and a FOMO on altcoins.

My assessment of this week is clear:

Bitcoin Yellow Forecast - Sunday, January 8 Chart
Bitcoin Yellow Forecast – Sunday, January 8 Chart

Do I really need to write this down in view of the chart? Yes, I think we are going to have a drop, maybe deep, maybe shallow, but it may give ideas for the “best” entry point into Bitcoin or altcoins. Of course, this is just my opinion, we could very well have a breakout with volume. But it will require a return of buying volume in this case, which is not present at the moment.

Moreover, we will have to be careful with the return of volatility, especially on Thursday with the announcements of inflation in the United States!

I hope you liked this article, if you did, don’t hesitate to share it! In the meantime, I wish you a good week and I’ll see you next week and don’t forget to give me your opinion on Bitcoin’s 2023 vision!