28 May 2024
The world’s largest cryptocurrency, Bitcoin (BTC), has been consolidating over the past week, trading between $67,000 and $70,000 after experiencing a brief 20% price correction that sent it as low as $56,400 in early May.
This consolidation period comes as inflows into the US spot Bitcoin ETF market have reignited, and selling pressure appears to have cooled off, both in the ETF market and among Bitcoin investors more broadly.
Bitcoin Selling Pressure Fades
According to Julio Moreno, head of research at on-chain market analytics firm CryptoQuant, the current Bitcoin price level of $70,000 differs from when it last reached that mark in March.
Moreno notes that traders are now exerting much lower selling pressure, as unrealized profits are only around 3%, compared to 69% in early March. This suggests that much of the “heavy selling” has been exhausted, as seen in the chart below.
Santiment data also shows that Bitcoin has once again eclipsed a $70,000 market capitalization, even as the US stock market took a hiatus for the Memorial Day holiday.
Market intelligence platform Santiment sees this as an encouraging sign, as it demonstrates BTC’s ability to perform positively on days when it is not closely correlated with the primary stock market, which has been the case for much of 2022.
Final Pre-Breakout Consolidation Phase
Despite this positive momentum, crypto analyst Rekt Capital has noted that Bitcoin’s latest weekly candle closed below the range high resistance of its ongoing “re-accumulation” phase, which spans roughly $60,000 to $70,000.
This likely sentences the leading cryptocurrency to further consolidation within this range, aligned with Rekt Capital’s thesis that two phases remain in the current bull cycle: the post-halving re-accumulation phase and the “parabolic rally phase.”
Historically, Bitcoin has tended to consolidate around all-time highs before embarking on the most illustrative stretch of its bull cycles. According to the analyst, Bitcoin has indeed been consolidating at these highs for quite some time now, especially by the standards of previous cycles.
While there is still room for further sideways trading at these elevated price levels, the time remaining in this phase is slowly running out. This leads to the belief that the long-awaited post-Halving rally, coupled with renewed investor sentiment, is poised to take the largest cryptocurrency on the market to even higher levels than the current $73,700 reached in mid-March.
As such, Bitcoin appears to be entering a critical juncture in its current bull cycle. The consolidation and re-accumulation that has dominated the market in recent months could soon give way to the next parabolic surge, should historical patterns hold.
As of now, BTC has gained 2% in the past 24 hours, adding to its 10% positive movement in the past month alone. Bitcoin is currently trading at $70,200.
Featured image from Shutterstock, chart from TradingView.com