Spring is compressing even more as Bitcoin’s volatility continues to diminish. Since the start of active trading in New York, the lower bound trading range has shifted to $29K, as BTCUSD finds support. The upper bound for the created triangle advanced to $30.5K, up 1.8 percent from current prices of $30,000 in the last 24 hours.
Bitcoin Consolidation Uninspiring
With continued range bound, Bitcoin (BTC) is temporarily back at $30,000 before Wall Street opens on May 25.
Although it may seem dull at first glance, Michal van de Poppe saw Bitcoin in short periods as a source of renewed interest, and predicted that its price would reach close to $33,000 after that.
he is Tell Twitter followers:
“Bitcoin broke out $29.4K and ran towards the next resistance area, if we held $29.4K, we would be good towards $32.8K. Finally.”
The price of Bitcoin is consolidating, which is risky both for bulls and bears. Both gain liquidity and become accustomed to current prices over time.
At the level of the market cycle, there is a high probability that the current consolidation will end with the collapse of the lower bound and the liquidation of stop orders, confirming the initial bearish momentum.
The bearish speculation is fueled by tightening monetary policy and slowing economic development, which leads to retail investors withdrawing money from bitcoin in favor of spending. It doesn’t help that people’s hopes of getting rich quick with cryptocurrency are not being fulfilled, as Bitcoin is now valued the same as it was in early 2021.
BTC/USD trades below $30k. Source: TradingView
Business investing is becoming more and more complex, bypassing naive buy-and-hold strategies. Investors withdraw money from bitcoin and put it into blockchains that enable smart contracts, such as Cardano and Polkadot, according to CoinShares. Last week, crypto funds lost $141 million in net capital outflows.
The European Central Bank has warned that high correlation between cryptocurrencies and stock markets is common during times of economic distress, and that digital assets will no longer be allowed to diversify their portfolios.
Featured image from iStockPhoto, Charts from TradingView.com