BTC & ETH Analysis: Low Volatility Causes Prices to Range. Could there be a Bigger Move Incoming?

BTC & ETH analysis
Share This Post

BTC & ETH analysis

It is no secret that Bitcoin (BTC) and Ethereum (ETH) are two of the biggest cryptocurrencies today, with BTC having a market cap of over $500 billion and ETH, having a market cap of over $200 billion. They are big enough that their price behavior tends to influence other cryptocurrencies. Which is why our attention has been inevitably drawn to them at this time.

As other traders would have noticed,  the crypto market has been so sluggish the past few days. Volatility on the higher time frames and daily trade volumes are lower than usual.

BTC & ETH analysis
Source: BTC/USD on TradingView (Daily Time Frame)

Since 22nd June and after its $31k pump, BTC has been experiencing a phase of consolidation within its market. Consolidation refers to a period when an asset’s price stabilizes, often after a significant upward or downward movement. It signifies a temporary pause in the market, setting the stage for the next significant price movement. This phase is characterized by a range-bound trading pattern, where the price fluctuates within a defined price range without a clear trend. The range pattern is between the new horizontal support level at $29920 (white) and the resistance area (red) at around $30508 – $31024. Traders and investors keen on BTC should carefully monitor market developments, regulatory changes, and technical indicators to anticipate the end of the consolidation phase and potential subsequent trends.

There are several factors contributing to BTC’s current consolidation:

Market Sentiment

Market sentiment plays a crucial role in shaping it price movements. After witnessing significant volatility and rapid price increases in previous years, the market sentiment appears to have shifted to a more cautious and patient stance. Traders and investors are now waiting for clearer signals before taking decisive actions, resulting in a more stable price range.

Regulatory Developments

Regulatory developments and government policies considerably impact the cryptocurrency market, including BTC. Governments around the world have been grappling with the need to create a regulatory framework that accommodates the growth of cryptocurrencies while addressing concerns such as money laundering, tax evasion, and consumer protection. Uncertainty surrounding regulatory decisions can contribute to price consolidation as market participants await clarity.

Institutional Involvement

Over the past couple of years, institutional adoption of BTC has significantly increased. Renowned companies, hedge funds, and even some governments have shown interest in BTC and other cryptocurrencies. However, as institutional involvement matures, it can also introduce a stabilizing influence on BTC’s price. Large investors tend to have longer-term investment horizons, leading to a decreased likelihood of frequent trading and increased price stability.

Technical Analysis

Traders often use technical analysis to predict future price movements based on historical patterns and indicators. During consolidation, technical analysis becomes crucial as traders look for chart patterns, support, and resistance levels, and other indicators to make informed trading decisions. These technical factors can contribute to the creation of a price range where buyers and sellers converge.

Market Maturity

BTC has come a long way since its inception in 2009. As the cryptocurrency market matures, price volatility decreases gradually, and consolidation becomes more frequent. BTC’s market capitalization and liquidity have grown substantially, attracting a broader range of participants and reducing the likelihood of sudden price swings.

BTC & ETH analysis
Source: ETH/USD on TradingView (Daily Time Frame)

It would seem ETH (as well as several other cryptos like DOGE, XRP, and SHIBA) is going through the same phase as BTC as we see above. Price, though in a long-term uptrend, has been moving sideways within support and resistance levels (white) of $1790.8 and $1921.3 respectively, with few short breakouts or as colloquially known, “fakeouts” in mid-April, early May, and mid-June.

As it is commonly known, there can still be small opportunities in a range-bound market, especially in smaller time frames, however, a period of consolidation is a good time to wait and thoroughly study the markets and catch up on news that might signal new moves. That being said, with this BTC & ETH analysis some analysts also speculate that there are “huge moves incoming”. We better keep our eyes open.

Featured image: Shutterstock

Disclaimer: The information on AlteBlock reflects the authors’ personal opinions. It does not represent AlteBlock’s opinions on whether to buy, sell, or hold specific investments. It is suggested that you conduct your own research before making any investing decisions. You use the information at your own risk. See Disclaimer for additional details.

Share This Post

Leave a Reply

Your email address will not be published. Required fields are marked *