Bitcoin (BTC<\/a>) recovered from new lows of $45,550 on Jan. 5 as analysts waited patiently for a \u201csqueeze\u201d to trigger fresh volatility.<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a>\u00a0showed BTC\/USD returning to the previous day\u2019s levels near $47,000 on Binance at the time of writing.<\/p>\n The repeated dips had failed to unsettle market participants, who now turned to the prospect of an abrupt move up or down in the coming weeks. Volatility in a time of flat funding rates and record-high open interest on derivatives markets, they had said Tuesday, was all but a given<\/a>.<\/p>\n \u201cThink we enter a volatility squeeze by end of the month,\u201d analyst William Clemente forecast in part of comments on Bitcoin\u2019s Bollinger band chart.<\/p>\n A popular indicator, which Clemente acknowledged as one of his \u201cfavorite\u201d tools, Bollinger bands use two standard deviation bands around Bitcoin\u2019s spot price to assess when volatility is likely to come<\/a>.<\/p>\n The question this week, however, was whether the move would be up or down.<\/p>\n \u201cIf we get that same setup from late July and initial pop down to low 40s out of a squeeze I will def be a buyer there,\u201d Clemente added during a discussion on the outlook.<\/p>\n A further post unveiled the likely cause of the dip to $45,550 \u2014 a trader\u2019s failed attempt<\/a> to short the lows and a subsequent buyback.<\/p>\n Those looking for upside, meanwhile, highlighted macro factors. Inflation, running hotter than anticipated, had not been fully reacted to by Bitcoin yet.<\/p>\n Related:\u00a0Bitcoin exchange balances trend back to historic lows as BTC withdrawals resume in January<\/a><\/em><\/strong><\/p>\n \u201cView-wise, we are still holding out for an upside move in the near-term,\u201d trading firm QCP Capital wrote<\/a> in its latest update to Telegram channel subscribers. <\/p>\n \u201cLooking at the 10-year breakeven inflation rate (which has historically had a high correlation with BTC), there has been a material divergence since end-December… If BTC plays catch up here we could see the move towards 60,000.\u201d<\/p><\/blockquote>\n Inflation cues are due next week with the publication of December\u2019s consumer price index data.<\/p>\n \u201cNever once BTC looked like this when it ended its bullish cycle. NEVER, since its inception,\u201d an even more bullish Galaxy continued<\/a> Tuesday.<\/p>\n \u201cIt always drops sharply without much recovery.\u201d<\/p><\/blockquote>\n Galaxy was observing periods of consolidation following price tops throughout Bitcoin\u2019s history, concluding that the $69,000 top in November could not logically form a multi-year high.\u00a0<\/p>\n \u201cWe are in a consolidation before the next massive move to the upside,\u201d he added.<\/p>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/c4a1abaa-5b0e-4ccc-b050-4b4c16b772ac.png\")
Analyst weighs prospect of \u201cfakedown\u201d toward $40,000<\/h2>\n
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Red herring candles<\/h2>\n
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