- Bitcoin’s daily trading volume remains elevated at highs above $10 miliardo, going against the technical theory that investor interest tends to drop during periods of consolidation. Perciò, the ongoing sideways trading near $3,900 may end with a bull breakout toward the recent high of $4,207.
- Trading volumes have been strong since the corrective rally kicked off in early February, so a range breakdown looks unlikely.
- Prices could first see a drop below $3,865 (marzo 12 low) due to the extended consolidation. Detto ciò, the short-term outlook would turn bearish only if the higher low of $3,743 created on March 3 is breached
Bitcoin’s current period of price consolidation may end with a bull breakout, price-volume analysis indicates.
While the cryptomarket leader is lacking a clear directional bias for the tenth straight day, 24-hour trading volume remains elevated near the 10-month high of $10.75 billion seen on Feb. 24, contradicting the popular theory that investor interest drops in a rangebound market.
Di conseguenza, the pullback from recent highs near $4,200 appears likely to be nothing more than a bull breather and BTC could soon draw bids.
Validating that argument is the fact that the recovery rally from the lows near $3,400 seen on Feb. 8 was backed by high volumes. Daily trading levels jumped above their 50-day moving average 35 days ago and have remained above the key metric ever since – a feat last observed during the height of the bull market in the third quarter of 2017, secondo CoinMarketCap data.
Quindi, the probability of BTC ending the ongoing consolidation with a strong move to the downside is quite low.
Come di scrittura, BTC is trading at $3,930, representing a 0.5 percent gain on a 24-hour basis, secondo CoinMarketCap. Twenty-four-hour trading volume is seen at $10.62 miliardo, while the 50-day moving average of daily trading volume is seen at $7.615 miliardo.
As seen above, BTC jumped 7.5 percent on Feb. 8 (arrow), invalidating the immediate bearish setup. The strong move was backed by a hike in trading volumes above their 50-day MA. Da allora, volume bars have consistently printed above the key average, validating the corrective rally from $3,400.
The setup looks even more bullish if we take into account the higher lows and higher highs on volume chart. Recent price pullbacks were accompanied by a drop in volumes (lack of bear support), explaining the weak follow-through to the rising channel breakdown witnessed on Feb. 24.
The failed breakdown coupled with elevated volumes amid price consolidation indicates scope for a re-test of $4,208 (febbraio. 24 alto).
Detto ciò, the long period of consolidation could test the bulls’ resolve, and a brief drop below the immediate support of $3,865 (marzo 12 low) could be seen before a continuation of the rally.
Rivelazione: The author holds no cryptocurrency assets at the time of writing.