I've watched Bitcoin closely for years, but its recent behavior seems qualitatively different from the usual up-and-down.
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On June 14, Bitcoin's price plummeted to a low of $65,000—a dip that wasn't momentous. What happened next was. Instead of rebounding or dropping further, Bitcoin entered a phase of silence. It's been moving in a tight range for the best part of the past couple of months, not breaking out and not crashing, which is quite rare for such a notoriously volatile asset.
An analyst I respect, James Check, pointed out that over the last 30 days, Bitcoin has been moving only within an 8.3% range. Now, this was either a moment of silence before the storm or the start of a new era for Bitcoin's stability. The suspense is real here. Check suggests two possible scenarios: Bitcoin staying in this stable phase, almost like any stablecoin, or we're on the verge of extreme volatility.
Another interesting input is the Bitcoin sell-side risk ratio, which is low. That would suggest that most of those looking for quick profits or cuts in losses have supported their position. In simple terms, there is not much selling pressure left in the market, and usually, this means the market is gearing up for a move.
Another indicator widely used by traders is the choppiness index, which signals that Bitcoin is all set to trend every week but still needs relaxation on a monthly frame. What could that be telling about how Bitcoin will look in the future? In the short term, I think we're going to see some volatility. Prices might swing up and down slightly as the market shakes out those less patient investors.
Yet, a long-term trend up or down may still be months off. This is where things could get constructive, even for this kind of period that analysts are calling chop-solidation. It would imply a time for Bitcoin prices to realign with historical cycles, including the halving cycles that usually precede major bull runs. According to one analyst who goes by the moniker 'Rekt Capital,' this consolidation is needed. For him, the current transaction is allowing Bitcoin to sync with previous times. This 'winter' is laying the groundwork for what could be a more predictable and stronger bull run.
As history has shown, such low-key trading is usually followed by an exponential uptick in growth. If this trend is followed through, then the market could realistically have another three months of such sideways action before sensing an upward trajectory. However, not everyone is convinced that the silence will last. At a point early Wednesday, Bitcoiner Samson Mow described the current state as a "super compressed coil," suggesting that if a move finally comes, it will be a huge spike. Meanwhile, Reflexivity Research's Will Clemente compared the current market consolidation to a comparable phase from last year—a phrase that is starting to hint that, just maybe, something big's around the corner.
The analyst on June 14 outlined two possible scenarios. According to him, Bitcoin may decline a bit toward $66,000 before proceeding further to $70,000, or we may see a more significant correction toward $60,000 to $62,000 than the rebound. At the moment of writing, Bitcoin approached the support level at $66,200, decreasing just 1.2% in the day. This release is some 10% off the mid-March all-time high, but it is within a roughly stable range.
Well, to me, the current behavior of Bitcoin is a mix of precaution and opportunity. While the lack of action does piss many short-term traders and quick profiteers off, it's also a time for the long-term investor to take stock and possibly prepare for the next big move.