Ever since March 11, Bitcoin price action has been jumpy. The daily chart makes it very apparent just how few consecutive green and red candles there have been. This yo-yo dynamic raises alarm bells. Medium term, we could see a retest of the “2024/Summer consolidation” range of about $73,000 – $74,000, and this zone should provide at least some degree of support. The current market conditions, marked by negative funding rates and declining open interest in Bitcoin futures, suggest that this period of indecisive price movement may persist.

Funding Rates and Open Interest

First, when funding rates are around zero, the cost to carry these positions is essentially non-existent. This reality further decreases the incentive for contracts holders to rush to close out their long or short positions. Negative basis is just starting to materialize in Bitcoin’s futures markets. This, along with the decrease in open interest (OI), is a sign that we should continue to see these larger, more erratic price moves going forward.

Key Levels for a Bullish Breakout

Specifically, Rekt Capital says that in order for Bitcoin to confirm a bullish breakout, the asset needs to get a weekly close above $88,000. A comparable price development played out in 2021 after Bitcoin reclaimed a weekly close above $40,000. Then, the next week’s candlestick came back to test this level before starting a move upward. As it stands now, Bitcoin’s volatility indicator is only the most recent sign of an imminent breakout in BTC’s price.

Bitcoin must reclaim weekly closes above the green Exponential Moving Average (EMA) at $88,400 in order to confirm a breakout towards $93,500. Second, it has to retest the level to confirm the breakout. The only big question that remains is whether or not Bitcoin will break free from its current multiweek range.

Bollinger Bands and Historical Patterns

Bitcoin may just be content to move sideways for a while. This is particularly the case if it fails to retake the $90,000 barrier. The Bollinger Bands are currently as squeezed as they were last summer and fall, from July ’24 to Oct. ’24. During that time, Bitcoin was consolidating between $63k and $69k.

The indicator displayed similar tightness between June 2023 and September 2023, preceding a substantial 176% surge in Bitcoin's price, escalating from $24,400 to $73,800 by March 14, 2024.