Bitcoin (BTC) has been trading within a narrow range for the past 12 days. Nonetheless, the fact that bulls have held the crucial $30,000 support level is seen as a short-term win for them.
Even though BTC has been experiencing sideways trading, there is a growing sense of optimism that it has the potential to break through upper resistance zones and reach new highs.
According to Yan Alleman, the co-founder of blockchain analytics firm Glassnode, Bitcoin’s recent sideways trading has paved the way for potential bullish momentum shortly. BTC’s current range-bound trading between $31,200 and $29,600 is seen as a consolidation period allowing for a re-establishment of bullish momentum in the market.
To assess market sentiment and potential price movements in the Bitcoin market, Glassnode has developed a proprietary metric called the Swissblock Risk Signal. This metric considers various factors, including volatility, on-chain activity, social sentiment, and more.
In the context of Alleman’s analysis, the Swissblock Risk Signal has remained stable at 0, as seen in the chart below, which suggests that the current market sentiment is neutral, with no clear dominance from either buyers or sellers.
This could indicate that the market is in a consolidation phase, as buyers and sellers are cautious before making any significant moves.
Additionally, Alleman predicts that BTC will likely break above $31,200, providing a strong foundation for buyers to target resistance levels at $33,000 and $34,800. However, even if the support at $29,600 were to break, Alleman believes that remaining bullish until the 50% retracement level near $28,200 seems viable.
This pullback could represent an opportunity for investors to accumulate BTC for the next leap as the market shows signs of potential growth. As such, Alleman’s analysis suggests that the current market conditions present a favorable opportunity for those looking to invest in Bitcoin.
Bitcoin Faces Critical Moment
Bitcoin is facing a critical moment as its price fluctuates within a narrow range, warns market analyst Michael Van de Poppe. With Bitcoin’s lows being taken again, Van de Poppe believes that if it fails to recover soon, it could test support at $28,500.
Adding to Bitcoin’s challenges is the expectation of a rate hike due to positive unemployment data. This leads to increased speculation that the Federal Reserve will raise interest rates sooner than expected. This could create a more challenging economic environment for cryptocurrencies.
If both major resistance lines of $29,600 and $28,500 give in to pressure, a potential bull run in the short term could be in danger, potentially resulting in a retracement down to the $27,500 resistance level. This would represent a 9% pullback from the current level of $30,200.
If such a scenario were to occur, it could take time for Bitcoin bulls to regain their current levels. In the past, a period of consolidation has typically followed a pullback before any further continuation to regain lost levels.
However, despite Bitcoin’s challenges, as long as it can hold the $30,000 line, BTC bulls have the upper hand. At the time of writing, BTC is trading at $30,200, down a slight 0.3% in the last 24 hours.
Featured image from iStock, chart from TradingView.com
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