Bitcoin (BTC) price is up 11.50% from its January 13 low of $88,900, forming a bullish pattern on the daily chart. The cryptocurrency asset also established a position above the equal high (EQ) between $95,350 and $96,150, which previously served as a resistance range.
Bitcoin 4 hour chart. Source: Cointelegraph/TradingView
After recent lows, favorable CPI data on January 15th has put BTC on the verge of another $100,000 retest. However, one particular setup suggested that BTC could regain its position higher than $103,000 before President-elect Trump’s official appointment on January 20th.
Bitcoin “Power of 3” Setup Hints Breakout
Bitcoin’s trend deviation/liquidity sweep near $89,000 on Monday occurred after a period of sideways consolidation between January 9 and January 13. However, BTC’s flash drop below $90,000 was a short-term move and sent the cryptocurrency asset higher.
Bitcoin 4 hour chart. Source: Cointelegraph/TradingView
This three-part setup is commonly known as Power of 3 or AMD. It is divided into the stages of accumulation, manipulation, and distribution. This concept focuses on areas of liquidity and provides a deeper perspective on how institutions trade the market against retail traders at certain levels.
Accumulation refers to the consolidation phase (between January 10 and January 13) where the smart money or experienced traders build positions and the price moves sideways.
Manipulation refers to a short period of time (such as the recent liquidity sweep on January 13th) where market makers attempt to influence the price, causing retail traders to panic sell or trap short-term traders opening new positions due to a new low range. .
Finally, the distribution phase is when the price begins to move to the opposite side of the operating range as an area of liquidity becomes available at the other end.
In the case of Bitcoin, there is clearly a bullish Power of 3 setup where the price surges during the distribution phase. BTC, currently hitting a high of $102,750 with external liquidity, could rise another 6.5% this week ahead of President-elect Donald Trump’s inauguration.
Bitcoin maximalist AlphaBTC highlighted a similar price range where the next liquidity “hot zone” has been identified. The analyst said:
“103K+ will produce HH in the nearest and intermediate time frame.”
However, the BTC trader added that failure to recover $103,000 opens the door for a decline to $80,000, where additional liquidity exists.
Related: Bitcoin Breakout ‘Isn’t Going To Be Too Late’ After January FOMC Meeting: 10x Research
Expected CPI print pushes BTC higher.
After the U.S. Producer Price Index (PPI) fell below expectations on January 14, risk assets such as stocks and cryptocurrencies showed a rebound of relief as PPI data suggested a possible rebound in inflation.
Core CPI data was 3.5% below estimates of 3.8%. Likewise, CPI data for January 15 rose to 2.9%, in line with expectations. Therefore, the broader market expected BTC to maintain its upward trend and surpass $100,000 in the next few days.
However, cryptocurrency commentator Momin Saqib believes Bitcoin will hit a new all-time high within a few weeks, regardless of US macroeconomic data. Saqib said.
“If CPI is favorable, we expect it to reach the $101-$102K range.”
Related: Bitcoin Inflows Under Trump Trigger New $249,000 BTC Price Target for 2025
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.