Since falling below $30,000 a few weeks ago, the price of bitcoin has been on a long period of consolidation. At one point, we thought the coin was finally ready for a breakout. It pulled in only to test $32,000 for a fall once again. So, when will this consolidation phase end? Here are some highlights:
Bitcoin Shows Some Weakness Despite Staying Above $30,000
The coin may go down to $28,650 in the coming days
A consolidation near $28,650 will be important for BTC in the near term.
Data Source: TradingView
When will the consolidation end?
It is difficult to say how long this merger will take. But two things can happen. Firstly, BTC may lose its resilience and drop below $28,650. This would trigger a massive sell-off which could see a drop of at least 20%.
The second scenario is more favorable for bulls, but only to a lesser extent. You see, despite consolidating between $28,650 and $30,700, bitcoin has failed to break out of the consolidation. In fact, at the start of the week, we saw the mega-cap approach $32,000 for the first time in weeks. However, a pullback ensued almost immediately. This suggests that the upward momentum for BTC is very limited.
In fact, the coin would need about two weeks of low volatility trading to develop enough momentum for a decent uptrend. As long as the price action remains above $28,650, a two-week consolidation phase should be sufficient.
Will BTC get more gains this year?
Since the beginning of 2022, BTC has suffered a net loss. Some analysts are now warning that the coin may struggle to clear $38,000 in the coming six months.
There is also some concern that the correction we are seeing in crypto right now has not really bottomed out yet. Downside risks for BTC could put substantial pressure on the price and push it below $25,000. However after that the recovery will be almost certain.