Bitcoin price taps $17.5K as traders in ‘disbelief’ doubt crypto rally
2023.01.11 08:36
Bitcoin (BTC) staged a brief but promising return to $17,500 overnight on Jan. 11 as newfound strength lingered.
BTC/USD 1-day candle chart (Bitstamp). Source: TradingView
Bitcoin fails to win over skeptical traders
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting new local highs of $17,504 on Bitstamp.
Almost tying with the peak from Dec. 16, the pair displayed rare upside momentum against a backdrop of some of the lowest volatility ever seen over the holiday season.
Traders and analysts anticipate an erratic reaction to upcoming macroeconomic data from the United States. Due on Jan. 12, the Consumer Price Index (CPI) print is expected to bolster the narrative that inflation is waning, offering a potential window of opportunity for risk assets.
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Nonetheless, many voices urged caution, with signs of fundamental price support still lacking.
Comments from Jerome Powell, Chair of the Federal Reserve, had disappointed markets the day prior, avoiding mention of future policy or the state of the economy itself.
“The real break out or dump will come on Thursday when CPI data is released,” popular trader Johnny summarized on Twitter.
A subsequent post cautioned on “bull tweeting as $BTC sits under higher time frame resistance at $17,600,” with Johnny previously urging followers not to “feel the urge to FOMO especially this week.”
“CPI this week could whip saw the prices back to the where they were last week,” he argued.
The conservative approach appeared symptomatic of the broader sense of apathy among market participants on the day, with little belief that BTC could put in a sustained rally.
The past weeks have seen continued low price predictions, with some of the best-known traders focusing on $12,000, $10,000 or even lower.
“Are we heading into ‘disbelief’?”, queried Philip Swift, co-founder of trading platform Decentrader.
A bearish take stayed firmly in place when it came to Il Capo of Crypto, who ignored the recent recovery across crypto to insist that there was “not a single bullish confirmation yet.”
“Just look. It’s there, right before your eyes. Bearish trend is intact,” he commented alongside the three-day BTC/USD chart.
“Bitcoin and most of the market are testing broken supports as resistances. We have seen this over and over.”
BTC/USD annotated chart. Source: Il Capo of Crypto/ Twitter
Altcoin volume “very concerning”
Equally doubtful was the prognosis for altcoins, with Ether (ETH) outperforming BTC as the rally set in.
Related: BTC price 3-week highs greet US CPI — 5 things to know in Bitcoin this week
ETH/USD traded up nearly 17% versus its mid-December lows of $1,150 on Jan. 10.
ETH/USD 1-day candle chart (Binance). Source: TradingView
Looking at trading volume dominance, Maartunn, a contributor at on-chain analytics platform CryptoQuant, feared the worst.
“In the 6-years crypto experience, I noticed something important. Healthy and sustainable price movements start with Bitcoin going up, with Ethereum/altcoins to follow,” he wrote in a blog post.
“Usually when traders getting bored on BTC, they start trading altcoins which are, in general, further on the risk curve. This makes them very fragile and easy to squeeze.”
An accompanying chart showed altcoin volume dominance above 50% of the total, potentially functioning as the writing on the wall for bulls.
“Today, altcoin dominance is again above 50%. Obviously, it doesn’t have to be as heavy as these examples. But be aware: when altcoins continue to dominate, there is a potential risk for further downside,” he added.
Altcoin volume dominance vs. BTC/USD annotated chart. Source: CryptoQuant
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