Bitcoin has a long way to go: Analysts warn of extended price consolidation

Bitcoin has a long way to go: Analysts warn of extended price consolidation

The latest developments in the Bitcoin market indicate that its price may remain in a dormant phase for a longer period. According to analysis by Glassnode, Bitcoin’s structure is “vulnerable” and suggests that without key technical support levels, the market could be in a long-term range, similar to the situation in 2022.

Key takeaways:

- Bitcoin is currently moving between cost basis levels and the real market, suggesting that further growth is uncertain.

- If the price fails to break the $98,400 level, an extended consolidation similar to the one in the first half of 2022 is expected.

- Bitcoin spot ETFs continue to see capital outflows, signaling caution from institutional investors.

Oversupply and Market Fragility

Glassnode notes that the current situation is similar to the one in the first quarter of 2022, when repeated failures to break certain levels kept the market in a prolonged consolidation. The price of Bitcoin is currently hovering around $81,100, while key resistance levels are at $98,400 and above.

The Realized Price and Cost Base indicator indicates that a large supply of Bitcoin has been created at prices above $100,000, which further creates selling pressure. This oversupply is preventing more significant growth and would require a significant increase in demand to change the situation.

Market Risk and Future Outlook

The Bitcoin Risk Index is hovering just below the high-risk threshold, indicating that the current consolidation could continue. Experts warn that a break of the $98,000-$100,000 threshold is necessary for the bullish trend to resume.

Capital outflows from ETF funds

At the same time, US spot Bitcoin ETFs have seen a massive capital outflow for the third day in a row – a total of over $700 million in a single day. This brings the total outflows from these funds since the beginning of the year to over $1.5 billion, with funds from BlackRock and Fidelity recording the largest outflows. This outflow reflects investor caution in an uncertain macroeconomic situation and the increased risk of further price declines.

Conclusion:

Bitcoin is currently in a period of quiet consolidation, which may last for several months until the market can break through key levels. If this does not happen, further developments may lead to further widening of the range or even a decline below important supports. Investors should be cautious and monitor technical signals that may indicate a change in trend.

*This is not an investment recommendation.

Coingarage Team