Expert Charles Edwards said that Bitcoin is in a "boring to death" consolidation period that may last from 1 to 6 months. Bitfinex analysts and Arthur Hayes expect Bitcoin to bottom out and rebound as market liquidity increases as the Fed slows QT. Santiment believes that the bottom is close, because investors' lack of confidence in buying the bottom is a strong signal that the price is close to the bottom.
Since hitting an all-time high of US$73,737 on March 14 this year, the price of Bitcoin has fluctuated and fallen. It once fell below US$56,758 on May 1, with a maximum retracement of about 23%. At the time of writing, it was trading at US$60,900. Such a sideways downward trend has lasted for about 2 months, testing investors' confidence in whether the bull market will resume.
Experts: The consolidation may last up to 6 months
In response, Charles Edwards, founder of cryptocurrency hedge fund Capriole Investment, tweeted that Bitcoin is in the stage of being "bored to death." He explained that this consolidation period usually lasts from one to six months and is designed to make investors extremely bored. If the retracement begins after Bitcoin reached a new high in March, this means that Bitcoin may remain sideways until August.
“When you get tired enough of the continued sideways trading, common reactions include thinking that the impact of the halving is already priced in, that the bull market is over, and selling Bitcoin at the lows in favor of buying stocks. These reactions of yours, as well as shorts Positions will usually reach their highest point on the eve of a big rise.”
Analysts at Bitfinex believe that Bitcoin’s recent weakness has occurred against the backdrop of a surge in the U.S. dollar and weakening expectations for interest rate cuts, and said that this consolidation period may continue into early summer.
"We expect that in a low volatility environment, market uncertainty will remain in the short term until QT (quantitative tightening) is actually tapered in June."
Previously, the Federal Reserve announced plans to slow down the pace of QT starting next month, which will increase the liquidity of the US dollar and thus facilitate the flow of funds to risky assets such as cryptocurrencies. This is one of the reasons why BitMEX founder Arthur Hayes is optimistic that the currency market will eventually bottom out and rebound. On the 3rd, he wrote that changes in U.S. monetary policy are equivalent to secretly printing money, which will add huge amounts of U.S. dollar liquidity to the financial system every month. Bitcoin will next consolidate between $60,000 and $70,000 until August, and then Begins a slow climb. This coincides with Edwards' expectations.
Santimen thinks the bottom is near
However, market intelligence platform Santiment believes the bottom may be near. The platform observed social data early this morning and pointed out: traders showed weak bottom-buying interest in Bitcoin’s latest retracement, which fell to $60,200 today. Generally speaking, a lack of confidence from the crowd is a strong sign that prices are near a bottom.
At the same time, the recent Bitcoin balance on exchanges has reached a five-year low, and BTC inflows into exchanges have dropped to the lowest in nearly 10 years, which means that investors lack the willingness to sell in anticipation of future price increases, which is a potential A sign that a bullish recovery is coming.
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