Bitcoin (BTC) has now entered a phase of extended consolidation, spending 42 days in what traders are calling the “boredom zone.” This lack of volatility in Bitcoin’s price has left the crypto community divided over whether the cryptocurrency is preparing for another surge or if it will experience a 20% pullback towards crucial support levels.
According to a May 30 post by pseudonymous crypto trader CryptoCon, the stagnant price movement of Bitcoin is a clear sign of boredom in the market. Over the past 42 days, Bitcoin’s price has only increased by 6.7%, currently trading at $67,680.
Aside from two brief instances where Bitcoin surpassed its support and resistance levels at $58,253 and $71,443 respectively, the cryptocurrency has primarily traded within a narrow range during this period.
On the optimistic side, pseudonymous crypto trader Willy Woo believes that Bitcoin’s extended consolidation is actually a positive sign that its price has not yet reached its peak. In a May 29 post, Woo predicts that Bitcoin still has “more room to run before topping out.”
Another pseudonymous trader, Daan Crypto Trades, argues that Bitcoin is currently in the price discovery phase, where anything is possible. According to Daan Crypto Trades, it is difficult to set price targets during this period as there are no clear levels to watch for. However, once Bitcoin breaks through its current all-time high of $73,679, Daan Crypto Trades believes it could reach $102,073 by the end of the year.
However, there are crypto traders who are less optimistic about Bitcoin’s future based on different indicators. Timothy Peterson, founder of Cane Island Alternative Advisors, highlights the Bitcoin Price to Metcalfe Value indicator, which suggests that Bitcoin’s value is proportional to the square of the number of users or participants in the network. Based on this indicator, Peterson predicts that Bitcoin’s price may drop to around $54,190.
Peterson explains that when the Bitcoin Price to Metcalfe Value ratio is above 100%, it has historically indicated a bear market with a decline of 20% or more. Currently, the ratio has reached 102%, leading Peterson to conclude that there is a 2/3 chance of a 20% decline within the next six months.
In conclusion, while some traders believe that Bitcoin is consolidating for another surge, others are more cautious and anticipate a 20% pullback in the coming months. As always, it is important for readers to conduct their own research and exercise caution when making investment decisions.