Bitcoin (BTC) rallied from fresh lows of $ 45,550 on January 5 as analysts patiently awaited a “choke” that triggered new volatility.

BTC / USD 1-hour candlestick chart. Source: TradingView

An analyst weighs the possibility of a “fakedown” towards $ 40,000

Data from Cointelegraph Markets Pro and TradingView showed the BTC / USD pair returning to the previous day’s levels near $ 47,000 on Binance at the time of writing.

The repeated declines have failed to unsettle market participants, who have now focused on the possibility of a sharp move higher or lower in the coming weeks. Volatility at a time of flat funding rates and record open interest in derivatives markets, they said Tuesday, was almost a given.

“I think we entered a volatility choke at the end of the month,” analyst William Clemente predicted in part of comments on Bitcoin’s Bollinger band chart.

Bollinger bands, a popular indicator that Clemente recognized as one of his “favorite” tools, use two standard deviation bands around the Bitcoin spot price to assess when volatility is likely to come.

Bitcoin Hits $ 47,000 As Analysts Agree Price Consolidation Can't Last
BTC / USD chart with Bollinger bands. Source: William Clemente on Twitter

However, the question this week was whether the move would be higher or lower.

“If we have the same late-July setup and an initial drop to the low of 40 due to a choke, I will definitely be a buyer,” Clemente added during a discussion on the outlook.

Another post revealed the probable cause of the drop to $ 45,550: the Failed attempt of a trader going short at the lows and then buying back.

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Bitcoin Hits $ 47,000 As Analysts Agree Price Consolidation Can't Last
Bitcoin volatility index graph. Source: Coinglass

We are still in the consolidation phase

Those seeking the rise, meanwhile, highlighted macroeconomic factors. Higher-than-expected inflation has yet to fully react to Bitcoin.

“From a vision point of view, we continue to expect a short-term upward move,” wrote trading firm QCP Capital in its latest update to Telegram channel subscribers.

“Looking at the high 10-year rate of inflation (which has historically been highly correlated with BTC), there has been a material divergence since the end of December … If BTC plays catch-up here we could see the move towards $ 60,000 “.

The December consumer price index (CPI) will be published next week.

“BTC never looked like this when its bull cycle ended. NEVER, since its inception”, continuous on Tuesday an even more bullish Galaxy.

“He always falls hard without much recovery.”

Galaxy looked at the consolidation periods that followed price highs throughout Bitcoin’s history, concluding that the November high of $ 69,000 could not logically form a multi-year high.

“We are in a consolidation ahead of the next massive move up,” he added.

Bitcoin Hits $ 47,000 As Analysts Agree Price Consolidation Can't Last
BTC chart with multi-year highs. Source: Galaxy on Twitter