Expert Charles Edwards suggests that Bitcoin is currently in a “boring to death” consolidation phase, which could last for 1 to 6 months. Bitfinex analyst and Arthur Hayes predict that with the Fed slowing down QT and increasing market liquidity, Bitcoin will hit bottom and rebound. Santiment believes that the bottom is near, as investors’ lack of confidence in buying at the bottom is a strong signal that the price is close to bottoming out.
Since reaching a historical high of $73,737 on March 14th this year, the price of Bitcoin has been fluctuating and declining, dropping below $56,758 on May 1st, with a maximum retracement of about 23%. At the time of writing, it is trading at $60,900. This sideways downward trend has lasted for about 2 months, testing investors’ confidence in whether the bull market will recover.
Expert: Consolidation could last up to 6 months
In response, Charles Edwards, founder of crypto hedge fund Capriole Investment, tweeted that Bitcoin is currently in a “boring to death” phase. He explained that this consolidation phase typically lasts for 1 to 6 months, with the purpose of making investors feel extremely bored. If we count from the retracement after Bitcoin’s new high in March, this means that Bitcoin may consolidate until August.
Bitfinex analyst believes that Bitcoin’s recent weakness occurred against the backdrop of a surge in the US dollar and weakened expectations of interest rate cuts. They also stated that this consolidation phase may continue until early summer.
Previously, the Federal Reserve announced plans to slow down QT starting next month, which will increase the liquidity of the US dollar and be beneficial to the flow of funds into risk assets such as cryptocurrencies. This is also one of the reasons why BitMEX founder Arthur Hayes is optimistic that the cryptocurrency market will eventually hit bottom and rebound. In an article published on the 3rd, he stated that the changes in US monetary policy are equivalent to covertly printing money, which will increase huge amounts of US dollar liquidity for the financial system. Bitcoin will then consolidate between $60,000 and $70,000 until August, followed by a slow climb. This coincides with Edwards’ expectations.
Santiment believes that the bottom is near
However, market intelligence platform Santiment believes that the bottom may already be near. The platform observed social data early this morning and pointed out that:
At the same time, the Bitcoin balances on exchanges have reached the lowest point in five years, and the inflow of BTC into exchanges has reached the lowest point in nearly 10 years. This indicates that investors lack the willingness to sell in anticipation of future price increases, which is a potential signal for an upcoming bullish recovery.