Bitcoin Faces More ‘Choppy’ Moves as a Dedicated BTC Price Metric Boils Over
Research from onchain analytics platform CryptoQuant suggests that rangebound behavior will keep frustrating Bitcoin bulls.
Analysis: Bitcoin Risks a Choppy End to 2024
The recent surge of Bitcoin hitting new all-time highs near $104,000 this week was followed by a snap crash of more than 10%. This volatility serves as a classic reminder of the unpredictable nature of crypto markets. However, CryptoQuant now presents a different short-term picture – boring BTC price action.
Understanding the Choppiness Index (CI)
CryptoQuant contributor Percival used the 14-day Choppiness Index to demonstrate that BTC/USD is currently embarking on a cooling-off period after its flash volatility. The Choppiness index (CI) uses a scale of 0-100, with higher values indicating ‘choppier’ market conditions. Conversely, low CI values point to trending markets – both up and down.
Crossing the 60 Level: A Turning Point for Traders
The Daily CI measured 56.7 at the time of writing on Dec. 7, per data from Cointelegraph Markets Pro and TradingView after hitting its highest levels since mid-August. As Percival noted, "One thing to take into account is the time factor of consolidation, in the 2020/2021 cycles there were 20 days of downtime and in the consolidation since March the average decline was ~20 days."
The Greater the Consolidation, the Greater the Rise
Percival also highlighted that longer consolidation periods are often followed by more violent returns to trend. However, for the short term, Bitcoin bulls may see frustratingly slow progress on price discovery.
New BTC Price Consolidation Due at $110,000
Considering likely BTC price targets once this happens, Percival used both market psychology and the profitability of speculative traders as a guide. Specifically, short-term holders (STHs) – entities holding coins for up to 155 days – will see profit landmarks at $110,000 and $120,000.
The Role of Short-Term Holders in BTC Price Action
Percival used the Realized Price of STH as a guide to market possible levels of strong resistance that we will encounter. The first level will be $110K (+1.5sd), a considerable profit zone for STHs.
Breaking Down the Realized Price Data
| Realized Price | Standard Deviation (SD) |
| — | — |
| $105,000 | +1 SD |
| $110,000 | +1.5 SD |
| $120,000 | +2 SD |
This data indicates that short-term holders will see profit landmarks at $110,000 and $120,000. These levels broadly correspond to standard deviations on an indicator measuring their aggregate realized price.
The Importance of Psychological Numbers
As traders connect to psychological numbers, $120K has a very impactful psychological and emotional charge, and being a value within +2sd makes this floor a deeper consolidation camp.
Conclusion: Bitcoin Risks a Choppy End to 2024
This article highlights the potential for rangebound behavior to continue in the short term, frustrating Bitcoin bulls. The Choppiness Index suggests that BTC/USD is currently embarking on a cooling-off period after its flash volatility. However, traders should be aware of the time factor of consolidation and the potential for violent returns to trend.
Related Articles:
- 4 New BTC Price Targets See Bitcoin Over $124K by New Year
- CryptoQuant’s Quicktake Blog Posts
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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