Bitcoin is in a ‘boring you to death’ phase, but the bottom could be near, analysts say

• BTC has been falling since hitting an all-time high in March.

• Friday’s rapid drop showed less interest from dip buyers, suggesting a bottom may be near, Santiment said.

• The lull could continue into early summer, creating a very bullish second half, Bitfinex analysts said.

Crypto markets are stuck in a lull with digital assets consolidating over the past few weeks, testing investor conviction that the bull market is resuming.

All attempts at sustainable recovery in recent weeks have been sold off, the last example next Friday, bitcoin {{BTC}} drops almost 5%, from $63,000 to just over $60,000. discouraging inflation expectations and hawkish comments from Federal Reserve policymakers.

Blockchain activity also indicates low participation, with transactions on the Bitcoin network falling off a cliff and the second largest ether {{ETH}} becoming inflationary.

We’ve been here before.

The current period resembles the action from April to September 2023, when bitcoin was stuck in the $25,000-$30,000 range for six excruciating months. Eventually, cryptocurrencies were able to sustain a multi-month rally, with BTC eventually reaching an all-time high in March of this year.

“Bitcoin is in the ‘bores you to death’ phase,” said Charles Edwards, founder of crypto hedge fund Capriole Investment. X post Thursday.

This consolidation period could last between one and six months, he explained, during which BTC will be limited with low volatility until market participants lose patience. Sentiment will be most negative just before consolidation ends, he added.

“When you become bored enough by a sideways cut, common symptoms include thinking the halving is in, that the bull market is over, and selling to buy stocks at the bottom,” Edwards said. “Your symptoms and shorts will peak just before the mega rally.”

That bottom could be near, according to analytics firm Santiment.

“Traders Show Low Interest in Buying the Dip for Bitcoin’s Latest Retracement,” Santiment said Friday, monitoring interactions on social networks. “In general, lack of crowd confidence is a strong sign that prices are near a bottom.”

Bitfinex analysts noted in a report released Friday that bitcoin’s recent weakness occurred amid a rising U.S. dollar and expectations for interest rate cuts were tempered, and said the The lull could continue until the beginning of summer.

The story continues

“We expect the market to remain uncertain in the near term in a low volatility environment until the QT is effectively reduced. [quantitative tightening] will take place in June.” The Federal Reserve announced plans to slow the pace of its balance sheet liquidation starting next month, which would have a positive impact on dollar liquidity, benefiting risky assets such as crypto -currencies that are sensitive to the global liquidity environment.

However, the greenback’s fall from its six-month high last week after the Fed meeting and weak jobs report – coinciding with BTC’s rebound from near $56,000 – was a turning point in trend, and a weaker dollar could support the next leg of the period. crypto rally.

“We believe sustained strength and recovery from BTC lows post FOMC and labor market data along with concurrent dollar weakness are a sign of a new regime, which would prepare us for a third and fourth very bullish quarter for bitcoin,” the authors said.

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