Expert Charles Edwards believes that Bitcoin is currently in a “boring to death” consolidation phase, which could last 1 to 6 months. Bitfinex analyst and Arthur Hayes predict that as the Federal Reserve slows down quantitative tightening (QT) and increases market liquidity, Bitcoin will bottom out and rebound. Santiment believes that the bottom is near, as the lack of confidence among investors to buy at lower prices is a strong signal that the price is approaching the bottom.
Since reaching a historical high of $73,737 on March 14th, the price of Bitcoin has been fluctuating and falling. On May 1st, it briefly dropped below $56,758, with a maximum retracement of about 23%. At the time of writing, it is being reported at $60,900. This sideways downward trend has lasted for about 2 months, testing investors’ confidence in the recovery of the bull market.
Expert: Consolidation Could Last Up to 6 Months
In response to this, Charles Edwards, founder of cryptocurrency hedge fund Capriole Investment, tweeted that Bitcoin is currently in a “boring to death” stage. He explains that this consolidation phase usually lasts 1 to 6 months and aims to make investors extremely bored. If we count from the retracement after Bitcoin reached its high in March, this means that Bitcoin may consolidate until August.
Bitfinex analyst believes that the recent weakness in Bitcoin is happening against the backdrop of a strengthening US dollar and reduced expectations of interest rate cuts. They also state that this consolidation period may continue until early summer.
Previously, the Federal Reserve announced plans to slow down the pace of QT starting next month, which will increase the liquidity of the US dollar and benefit 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 bottom out and rebound. In an article he wrote on the 3rd, he stated that the changes in US monetary policy are equivalent to secretly printing money, which will increase a huge amount of liquidity in the financial system every month. He predicts that Bitcoin will consolidate between $60,000 and $70,000 until August and then slowly climb. This aligns with Edwards’ expectations.
Santiment believes that the bottom may be 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:
At the same time, the Bitcoin balance on exchanges has reached the lowest point in five years, and the inflow of BTC to exchanges has dropped to the lowest level in nearly 10 years. This indicates that investors lack the willingness to sell in anticipation of future price increases, which is a potential signal of an upcoming bullish recovery.