Spring is further compressed as Bitcoin swings continue to decline. Since the start of active trading in New York, the lower end of the trading range has shifted to $29K where the BTCUSD has found support. The upper bound of the constructed triangle has risen to $30.5K, up 1.8 percent from current prices of $30K in the past 24 hours.
Bitcoin Consolidation Uninspiring
As range compliance continued, Bitcoin (BTC) temporarily bounced back to $30,000 before Wall Street opened on May 25.
While it may seem boring at first glance, Michal van de Poppe saw Bitcoin as a source of renewed interest in the near term, predicting a run to nearly $33,000 after this.
He told his Twitter followers:
“Bitcoin broke through $29.4K and raced into the next resistance zone, if we hold $29.4K we are good towards $32.8K. Finally.”
The price of Bitcoin is consolidating, which is as dangerous for bulls as it is for bears. Both gain liquidity and become accustomed to existing prices over time.
At the market cycle level, there is a good chance that the current consolidation will end with a lower bound collapse and the liquidation of stop orders, confirming the initial downward momentum.
Related reading | Investors can expect a downward trend for the Bitcoin and Ethereum market over the next 3 months
The bearish forecast is fueled by monetary policy tightening and slowing economic development, causing retail investors to take money out of bitcoin in favor of spending. It doesn’t help that people’s hopes of getting rich quick with cryptocurrencies are not coming true, as bitcoin is now the same value as it was in early 2021.
BTC/USD is trading below $30k. Source: TradingView
Investing in the business is becoming more sophisticated and goes beyond naive buy-and-hold strategies. Investors are taking money out of bitcoin and putting 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 ECB warned that the high correlation between cryptocurrencies and stock markets is common in times of economic hardship, and that digital assets should 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