Crypto market analysts are suggesting that the price of Bitcoin could remain stagnant for up to 2 months post halving. Despite the excitement surrounding the recent halving in the cryptocurrency market, recent market action points to the digital asset’s price stabilizing with low volatility expected this summer. The market shift with tons of liquidity moving into altcoins could also play a major role in the Bitcoin’s price movements, at least in the near term.
Bitcoin price movement slowing down
Analysts at Bitfinex, a top crypto exchange have released a report that suggests Bitcoin may be entering a phase of price stabilization that may last up to two months. According to the analysis, Bitcoin will likely continue to lead the cryptocurrency market through May and be a crucial gauge of the total market capitalization of the industry.
Bitfinex analysts note that unlike prior cycles, institutions and consumers are now more knowledgeable about the economic fundamentals that cause changes in the market. This understanding could lead to a one to two-month consolidation phase for Bitcoin. Prices may therefore change, possibly going as high as $10,000 in either direction.
The peak market dominance of Bitcoin appears to be eroding as liquidity moves towards alternative coins, leading to the predicted stagnation. This change is explained by the new Bitcoin supply being cut in half. This historically has an effect of increasing investor risk appetite and focusing attention on cryptocurrencies.Bitfinex analysts wrote.
The 57 percent level in BTC.D represents a significant technical and psychological benchmark based on historical data. Once Bitcoin dominance reaches this level, it tends to experience a sharp rejection indicating a shift in market sentiment and capital flow from Bitcoin to altcoins. Following last week’s halving, we saw BTC.D reach 57 percent and then fall sharply through it.
Market experts are also keeping a careful eye on Bitcoin derivatives. The recent decrease in implied volatility points to a calmer summer for Bitcoin. In this regard Jag Kooner, Bitfinex Head of Derivatives, said
Summers are usually low volatility periods, and traders are starting to position accordingly based on their bias
Bitcoin Bull Market Not Over
According to a well-known Bitcoin trader known as Titan of Crypto on Twitter/X, the bull market is still going strong. The renowned trader through a post on X indicated that there is still some momentum in the Bitcoin uptrend despite numerous demands from some cryptocurrency fans for the start of a bear market using data from the BTC/USD daily chart.
The trader identified a few key spots on the chart where BTC responded to the indicators differently based on his analysis. Titan of Crypto identified two “Retest Points” and a “Real Breakout” in the latter phases of the price action. He also noted a point where the indicator indicated a price “Rejection” in between the “Retest Points.”
This week, Bitcoin fell below the significant support level of $60,000 after sustained sideways movement since it hit a new all-time high (ATH) of $73,794 in the middle of March.
This decline is the largest one-sided shift since April 19, the day of Bitcoin’s most recent halving. Because of the magnitude of this dip, there is a sense of Fear, Uncertainty, and Doubt (FUD) in the Bitcoin market, leading many people to believe that a new bear market is beginning. However, Titan of Crypto disagrees, arguing that the decline is just a brief shift in price.
As the crypto market continues to adjust to the effects of the recent halving and its subsequent economic signals, it is advisable for investors to pay close attention to the developments. It is of utmost importance to monitor the shifts in liquidity and market sentiment that could have a significant bearing on the digital assets’ price movements going forward.
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