Rangebound BTC Price Action Is Tipped to Flip in an Instant on “Very Thin” Liquidity as a Stubborn Broader Trading Range Endures

CPI week is here again, while Fed Chair Jerome Powell is due to testify twice before US lawmakers. Tariff talk is back, this time involving a whole

Bitcoin (BTC) price action remained largely unremarkable at the start of the week as a weekend of modest losses gave way to equally mild gains on Monday.

Fresh macroeconomic data from the United States failed to provide any surprises, while talk of tariff wars continued, though with little impact on crypto markets. Despite the lack of volatility, some traders eyed potential liquidity hunts and expressed optimism for an upcoming market recovery. Others highlighted the extended period of sideways trading and anticipated further time being needed before BTC/USD strength is challenged.

BTC price stayed within a well-defined range as traders awaited the next market catalyst. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering around the center of its multi-month trading range on Monday, with fresh losses over the weekend largely reversing by early in the day.

The buzz around fresh tariffs from the U.S. government also failed to spark a repeat of the intense volatility seen this time last week, with traders still waiting for the next market catalyst.

“Slow moves in the past 4 days which was normal in order to fill most wicks,” popular trader CrypNuevo summarized in a thread on X on Monday.

The trader referred to the upcoming U.S. macroeconomic data prints, which include the Consumer Price Index (CPI) numbers for January.

“Orderbook is very thin at the moment, PA very slow and not seeing any strong signals to determine up or down,” he continued, giving $94,000 as a potential short-term bottom should a liquidity hunt ensue.

Others were more optimistic, with crypto trader, analyst and entrepreneur Michaël van de Poppe eyeing potential for a marketwide recovery in the coming days.

“Good start of the week with upwards momentum after Monday open,” he commented, referring to current weak performance by altcoins and Ether

Meanwhile, popular trader Poseidon characterized the situation as “in a range between 90k-110k over 3 months, but everyone is calling macro tops and bottoms in this range, while actually, nothing is happening on the weekly/monthly chart.”

“We are in a range, and as long as we don't break down and accept below it, I doubt we will see lower 70k,” he added, referring to Bitcoin’s 21-week exponential moving average, currently at $89,200.

A familiar round of U.S. macroeconomic data prints combines with testimony by Federal Reserve Chair Jerome Powell this week. Consumer Price Index (CPI) and Producer Price Index (PPI) figures for January are due on Feb. 12 and 13, respectively.

The latter will be accompanied by unemployment claims, a weekly release that has functioned as a short-term volatility catalyst for crypto markets in recent months. Beginning on Feb. 11, Fed Chair Powell will testify before the Senate Banking Committee and House Financial Services panel.

The events come amid mixed inflation signals, with Powell remaining hawkish on the outlook for 2025, including any further interest rate cuts — a key issue for risk assets.

The latest estimates from CME Group’s FedWatch Tool currently put the odds of a small 0.25% cut at the Fed’s next meeting in March at just 6.5%, down from nearly 15% a week ago.

Eyeing developments at the Fed, however, trading resource The Kobeissi Letter noticed a “worrisome” phenomenon playing out.

The U.S. Reverse Repo Facility (RRP) has dropped to its lowest levels since early 2021 — a sign that restrictive financial policy in the form of so-called quantitative tightening, or QT, may not last much longer despite the Fed's hawkish mood.

“Less money in the RRP means more money in the market. Since $2.5 trillion has been depleted, does this mean the Fed can no longer inject liquidity in the market?” Kobeissi queried in part of an X thread on the topic at the weekend.

The ghost of last week’s trade war panic continues to permeate markets as the U.S. government announces further tariff plans. Targeting steel and aluminum, the blanket measures will seek to match tariffs already in place among U.S. trading partners.

As a result, weakness in crypto markets was observed over the weekend, with U.S. stock futures nonetheless shrugging off the news in a key divergence from behavior seen a week ago.

Clear winner in the current situation is gold, which tagged multiple new all-time highs last week and neared $2,900 per ounce for the first time on Monday. Despite traditionally following gold's trends with a several-month delay, however, Bitcoin's inability to capitalize on safe-haven appetite has not gone unnoticed.

“For all of the hype and supposed adoption rate Bitcoin has received in recent years, VERY INTERESTING the $BTC has struggled to pull away from Gold,”