- Bitcoin took a 17% nosedive and now sits within a narrow trading range.
- Meanwhile, Ethereum retraced to a crucial support level that will determine where its price is headed next.
- A significant spike in stablecoins exchange inflow suggests that some investors are preparing to re-enter the market.
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Roughly $2 billion in long positions have been liquidated during the most recent correction in the cryptocurrency market. On-chain analysis now shows that investors may not have to wait long to make up their losses.
Both Bitcoin and Ethereum are already showing signs of a potential rebound.
Bitcoin Consolidates Before Next Major Move
The flagship cryptocurrency took a 17% nosedive after rising to a new yearly high of nearly $19,500 on Nov. 25. Since then, prices have been consolidating within a narrow trading range without providing a clear path for where they are headed next.
The lackluster price action seen in the past few days forced the Bollinger bands to squeeze on the 1-hour chart, indicating that a major price movement is underway.
Some of the most prominent technical analysts in the industry view squeezes as stagnation periods that are usually succeeded by high volatility.
The longer the squeeze, the more violent the breakout that follows.
Given the lack of direction for Bitcoin’s trend, the area between the lower and upper bands can be considered a reasonable no-trade zone. Only a candlestick close above or below any of these critical hurdles will determine whether or not the pioneer cryptocurrency is poised to recover lost ground.
Slicing through the overhead resistance at $17,420 would likely be followed by a spike in buy orders behind Bitcoin. The potential increase in demand could have the strength to push prices back above $18,000.
As a matter of fact, one of the most significant resistance barriers ahead of BTC sits at $18,350.
Conversely, if sell orders begin to pile up…