Bitcoin continues its upward movement and successfully consolidates above the key resistance levels at $18k and $18.4k. The asset is closely approaching the $19k resistance level, where it encounters increased resistance from sellers.

There are also enough triggers for the upward movement besides the long consolidation. At the end of January 12, it became known that the inflation rate is slowing down according to the forecasts. In December, the consumer price index declined from 7.1% to 6.5%.

As a result, the probability of a 0.25% increase in the key rate on CME is more than 90%. This means that the markets are encouraged by the statistics and confident that the Fed will not tighten monetary policy at the next meeting.

It also fueled investor interest in the next speech of Fed Chairman Jerome Powell, who still lacks information about the dynamics of inflation. Reports also show that Bitcoin hashrate has updated its historical high after the December collapse at around 270.25 EH/s.

The bullish movement continues in the stock market, where the SPX index continues its upward movement, although not as brightly as Bitcoin. However, in the short term, the S&P 500 may expect a local decline, which may mean a break in BTC relation, or a similar movement of the cryptocurrency.

BTC/USD Analysis

Following the results of January 12, Bitcoin formed the largest bullish candlestick since November 10. Also, the upward movement allowed the price of the cryptocurrency to test the $19.1k level. Subsequently, there was an injection of bearish volumes and the price fell to the $18.9k local support level.

On the daily timeframe, the cryptocurrency is becoming more and more overbought, which has not happened since the beginning of 2022. The RSI has reached 80, and the stochastic oscillator is approaching the level of 92. Technical metrics turned sideways, but the local consolidation will end with the continuation of the upward movement.

On-chain activity

We already observed a similar movement in the price of Bitcoin in mid-December, when the asset stumbled over the $18.2k level. Then the main problem of the cryptocurrency was low trading volumes and the negative dynamics of network activity.

As of January 13, the situation is radically different: trading volumes and the number of unique addresses in the Bitcoin network are constantly growing, forming an upward trend. Activity will likely drop a little over the weekend, so the possibility of a corrective movement is not ruled out.

Results

Bitcoin has been in an upward trend for 13 days in a row, and most importantly, large buyers have entered the market, as can be seen from the last daily candle. At the same time, technical metrics look extremely overbought, therefore we should expect the asset to correct in the near future.

Most likely, Bitcoin will be able to accumulate strength to re-test the $19k–$19.1k area, but we should expect at least a local correction. At the most, there will be another attempt to drop below $16.4k, where large amounts of liquidity are concentrated.