The spring is getting narrower as bitcoin volatility eases. Since the start of active trading in New York, the lower boundary of the trading range has shifted to $29K, where BTCUSD has found support. The upper boundary of the formed triangle has increased by 1.8% from current prices of $30K to $30.5K over the past 24 hours.
bitcoin consolidation nostalgic
Bitcoin (BTC) bounced back to $30,000 before Wall Street opened on May 25 as the range continued to follow.
While this may seem dull at first glance, Michal van de Poppe sees bitcoin as a source of renewed interest in the short term, predicting the next one run closer to $33,000.
He said His Twitter followers:
“Bitcoin broke $29.4K and ran towards the next resistance area, if we hold $29.4K, we will be good for $32.8K. Eventually.”
The price of bitcoin is consolidating, which is dangerous for bulls and bears alike. Both gain liquidity and over time become accustomed to current prices.
At the market-cycle level, there is a good chance that the current consolidation will end with a collapse of the lower limit and liquidation of stop orders, which confirms the initial downside momentum.
Related Reading | Investors Can Expect Bitcoin and Ethereum Markets to Drop for the Next 3 Months
The bearish forecast is driven by tightening monetary policy and declining economic growth, causing retail investors to withdraw money from bitcoin in favor of spending. It doesn’t help that people’s hopes of getting rich quickly with cryptocurrencies aren’t coming true, as bitcoin’s value is now the same as it was in early 2021.
BTC/USD trades below $30k. Source: TradingView
Investing in business is becoming more sophisticated, moving beyond nave buy-and-hold strategies. According to CoinShares, investors are taking money out of bitcoin and putting it into the blockchain that enables smart contracts like Cardano and Polkadot. Last week, crypto funds lost $141 million in net capital outflows.
The ECB warned that high correlations between cryptocurrencies and stock markets are common in times of economic hardship, and digital assets will no longer be allowed to diversify investment portfolios.
Related Reading | Institutional investors seek safe haven in crypto products amid market uncertainty
Featured image from iStockPhoto, Charts from TradingView.com