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BTC may be forming an accumulation range

From March till November of 2024 Bitcoin experienced a downtrend consolidation, eventually achieving a 7-month macro accumulation. Following a breakout, BTC underwent a rapid markup, reaching $90,000, where it formed an upward channel of 1-month distribution. After breaking down from this channel, BTC seems to be entered a range that could persist for several weeks as part of a potential reaccumulation phase.

During this time, the price may be ranging between the Point of Control (POC) of the range at the current development stage (which aligns with the Volume Weighted Average Price (VWAP) anchored at the all-time high) and VWAP anchored at beginning of the 1-month distribution - currently between around $98,000 to $92,000, respectively. The range deviations can we expected to reach around 100k and 90k or value area high of the range at the current development stage. Downwards the price can spring down to around 88k or around VWAP anchored at the breakout of the 7-month accumulation range where the a long liquidation cluster is based. The range could play out for several weeks aiming to accumulate build up shorts and flushing the longs.

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Zoomed out view:

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The idea is based on the observation that the Cumulative Volume Delta (CVD) indicates absorption of aggressive market sellers - accumulation with potential of forming a bottom:
coinalyze.net/snapshot/-1IVjEjx

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For confluence of potential downside deviation (spring) target is a imbalance of buying stacked between $83,000 and $84,300.

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Added additional levels of interest. Does not mean the levels has to be met, but those have been meaningful for the market:

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It has been 10 days since the initial breakdown. While the charts haven’t shown significant changes, browsing through social media gives the impression that sentiment among the crowd is becoming increasingly bearish. To avoid being influenced by this crowd mentality, I am analyzing the charts to see if there are any reasons to adopt this gradually increasing bearish outlook by public.

Over these 10 days, the price has been compressing between VWAPs anchored at significant pivots. This price movement could be interpreted as either ranging or trending downward. Nevertheless, the horizontal support level has been retested multiple times, suggesting either that passive buyers are stronger than the selling pressure or that sellers lack interest in breaking this level. The downward trend toward support may indicate growing interest in selling into this stronger support. Conversely, if there were significant interest in distributing rather than accumulating, we would likely see more pronounced ranging behavior. From this psychological perspective, the chart does not currently lead me toward a bearish bias.

Looking at volume and momentum indicators, there is also no compelling evidence for a bearish stance. During the 10-day period of support retesting, the MACD and RSI momentum indicators point to weakening selling pressure. OBV (On-Balance Volume) and CVD (Cumulative Volume Delta) provide mixed signals. While OBV suggests that the slight downward trend in price is not supported by existing selling pressure (potentially indicating trend exhaustion), CVD suggests the opposite—an increase in selling pressure not reflected in price, which may signal absorption of selling pressure. Aggregated CVD (coinalyze.net/snapshot/MdiduNoz) shows selling absorption. However, upward movements have lacked strong buyer support, which explains the recent downtrend towards support.

Taken together, these observations suggest that the support level has been strong enough to absorb aggressive selling, but there has not been sufficient buying aggression to retest the range highs. In other words, while market sentiment is fearful, support remains intact. This does not confirm a bullish outlook, but neither does it support a decisive bearish conclusion. On the contrary, markets often buy into fear before moving higher—indicative of accumulation.

Bearish sentiment is further supported by the potential short liquidation volume, which significantly exceeds that of longs. According to 30-day liquidation data from Coinglass, approximately 10B in short volume has accumulated up to the 106K price level, while only around 2B in long liquidation volume exists down to 90K. Additionally, there appears to be a vacuum of stop-loss orders below 90K, extending toward 82K. This imbalance in leveraged positions suggests a higher risk of short liquidations. Consequently, bearish expectations for filling buy orders near 80K may not materialize, as 90K could be sufficient to end longs and trigger movement toward the liquidity from shorts.

In conclusion, I see no strong reasons to adopt a fearful stance at the moment. On the contrary, price action, underlying sentiment, and market psychology appear rather promising. Current observations align with the initial idea of a range-bound, time-based capitulation. While there has not yet been a need to liquidate longs in this fearful market, the anticipated short buildup seems to be materializing. Whether this outlook is bullish or bearish is subjective. Based on price compression, the next significant range movement may occur soon.

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The market appears to be behaving as expected within the current range. Following a rapid pump to the highs and an equally swift dump back to support, both short and long positions have faced liquidations. The bearish sentiment is now dominant, evidenced by the fact that potential short liquidations have exceeded $12 billion, compared to only around $4 billion for longs.

Meanwhile, technical indicators such as RSI, OBV, and CVD suggest signs of selling absorption and trend exhaustion. While it's uncertain whether market manipulations have entirely subsided, contrary to the bearish sentiment on support, the conditions now seem significantly more favorable for the market to break out of the range to the upside than they have been in recent weeks. This does not exclude the possibility of liquidity grabs below the support as that has not happened so far. Not that it has to happen as longs seem to have suffered quite a violence already.

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The idea is finalized and played out as imagined in idea described above. Noe is the next step:

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