Bitcoin's Rangebound Price Action Signals Imminent Breakout

Bitcoin's price action has been unusually rangebound, with volumes decreasing and market participants bracing for a shakeout. According to CryptoQuant, a leading onchain analytics platform, Bitcoin's Choppiness Index on both daily and weekly charts is unstable, suggesting a more aggressive movement to either side of the box. This is reminiscent of the August 2023 scenario, where a snap drop preceded a multi-month uptrend.

Percival, a CryptoQuant contributor, noted that the 90-day range for Bitcoin has been around 16% from the maximum to the minimum of the lateral range. In 2023, before the uptrend, price cleared all traders of 'boring' positions in the opposite direction due to low volatility, further strengthening the case for a major liquidity grab to come.

Considering potential price floors, Percival flagged the short-term holder (STH) cost basis at $92,000 as a level of interest. Should this fail, the 200-day exponential moving average (EMA), currently at $85,000, looked attractive. The STH Spent Output Profit Ratio (SOPR) metric reflects its mildly negative values from August 2023, indicating a potential repeat of the 2023 scenario.

While the possibility of false moves before the bull run is strong, many breakout traders are positioned in these zones, and the sovereign market tends to blow up these positions and return to the expected course. As always, it is essential to conduct thorough research and consider the risks involved before making any investment decisions.