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Bitcoin Choppiness Index Hints $110k BTC Will be Tough to Crack

Article by William Suberg

Bitcoin faces more “choppy” moves as a dedicated BTC price metric boils over.

Research from onchain analytics platform CryptoQuant on Dec. 6 suggests that rangebound behavior will keep frustrating Bitcoin bulls.

Analysis: Bitcoin risks a choppy end to 2024

Bitcoin hitting new all-time highs near $104,000 this week preceded a snap crash of more than 10%.

With liquidations nearing $1 billion in just 24 hours, traders received a classic reminder of how volatile crypto markets can become.

CryptoQuant, however, now sees a different short-term picture — boring BTC price action.

“The 14-day Choppiness Index is in an early zone showing corrective moves during consolidation,” contributor Percival wrote in one of its Quicktake blog posts.

Percival used the Choppiness index (CI) to demonstrate that BTC/USD is now embarking on a cooling-off period after its flash volatility.

CI uses a scale of 0-100, with higher values indicating “choppier” market conditions. A low value conversely points to a trending market — both up and down. Crossing the 60 level from below or the 30 level from above represents events of interest to traders eyeing a potential switch from choppy to trending and vice versa.

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.

“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,” Percival continued.

““The greater the consolidation, the greater the rise.””

New BTC price consolidation due at $110,000

While a longer consolidation period should result in a more violent return to trend, for the short term, Bitcoin bulls may see frustratingly slow progress on price discovery.

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 hodling coins for up to 155 days — 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.

“Looking at the Realized Price of STH we can market possible levels of strong resistance that we will encounter, the first level will be $110K (+1.5sd), a considerable profit zone for STH,” the post concluded.

“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.”