Bitcoin price action returned to the $17,500 level for the first time in nearly a month, but the traders still refuse to flip bullish.
The flagship crypto staged a short but promising return to $17,500 overnight on January 11 as newfound strength seemed to linger.
Bitcoin Did Not Win Over Doubtful Traders
Data acquired from TradingView showed BTC/USD reaching new local highs of $17,504 on Bitstamp.
Nearly tying with the peak from December 16, the pair showed rare upside momentum against a backdrop of some of the lowest volatility ever seen over the holiday season.
Analysts and traders expect an erratic reaction to forthcoming macroeconomic data from the United States. Due on January 12, the Consumer Price Index (CPI) print is projected to boost the narrative that inflation is easing, providing a possible window of opportunity for the risk assets.
Nevertheless, a majority of the voices in the market urged caution, with signs of fundamental price support still absent.
Comments from the Chair of the Federal Reserve, Jerome Powell, had disappointed markets the previous day, avoiding mention of future policy or the state of the general economy.
Popular trader Johnny summarized on Twitter:
“The real break out or dump will come on Thursday when CPI data is released.”
Another post cautioned on “bull tweeting as $BTC sits under higher time frame resistance at $17,600” with Johnny also encouraging followers not to “feel the urge to FOMO, especially this week.”
He argued:
“CPI this week could whipsaw the prices back to the place where they were last week.”
The conservative approach seemed symptomatic of the wider sense of apathy among market participants on the day, with little belief that Bitcoin might put in a strong and sustained rally.
Notably, the past weeks have seen some continued low price predictions, with some of the best-known traders focusing mainly on $12,000, $10,000, and lower.
“Are we heading into ‘disbelief’?”, queried the co-founder of trading platform Decentrader, Philip Swift.
A bearish take remained firmly in place when it came to Il Capo of Crypto, who ignored the recent recovery across the cryptocurrency market to insist that there was “not a single bullish confirmation yet.”
He commented on the three-day BTC/USD chart:
“Just look. It’s there, right before your eyes. The bearish trend is intact. Bitcoin and most of the market are testing broken supports as resistances. We have seen this over and over.”
Altcoin Volume ‘Very Worrying’
Equally doubtful was the prognosis for altcoins, with Ether (ETH) outperforming Bitcoin as the rally set in.
ETH/USD traded up almost 17% compared to its mid-December lows of $1,150 on January 10.
While looking at trading volume dominance, one contributor at on-chain analytics platform CryptoQuant, Maartunn, feared the worst. He wrote in a blog post:
“In the 6-year crypto experience, I noticed something important. Healthy and sustainable price movements start with Bitcoin going up, with Ethereum/altcoins to follow.”
“Usually when traders get 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 that altcoin volume dominance is above 50% of the total, possibly working as the writing on the wall for bulls. He added:
“Today, altcoin dominance is again above 50%. 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.”
