- Bitcoin’s daily trading volume remains elevated at highs above $10 billion, going against the technical theory that investor interest tends to drop during periods of consolidation. Therefore, 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 (March 12 low) due to the extended consolidation. That said, 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.
As a result, 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, according to CoinMarketCap data.
Hence, the probability of BTC ending the ongoing consolidation with a strong move to the downside is quite low.