Bitcoin prices have suffered from a distinct malaise lately, trading within a reasonably defined range for several weeks.
Since the end of May, digital currency has been blocked mainly between $ 30,000 and $ 42,000, CoinDesk figures show.
Despite this, some market watchers have claimed that the digital currency is not only on the verge of breaking out of its current range, but could see some serious benefits as well.[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Oliver von Landsberg-Sadie, CEO of payments company BCB Group, spoke about it recently.
“The whole chain analysis suggests that we are at the end of a slingshot,” he said. CoinDesk.
“It’s calm now, but don’t confuse it with a lack of interest. “
Potentially “explosive” gains
Scott Melker, a crypto investor and analyst who hosts The Wolf of Every Street Podcast, offered his two cents.
“The price of Bitcoin has been consolidating in a narrow range between 42K and 30K for over 8 weeks, with volume and volatility decreasing,” he noted.
“The longer the price of an asset consolidates, the greater the expected expansion when volume and volatility return. We’ve seen this countless times with Bitcoin, so the next move is expected to be explosive, ”Melker said.
“Chain analysis indicates that supply is shifting from impatient speculators to Bitcoin whales with large wallets, with new wallets sold and old, larger wallets buying.”
“This theoretically indicates that smart money is piling up ahead of the next major upward move.”
Jake Wujastyk, Chief Market Analyst at TrendSpider, expressed a different view, stating that:
“I don’t agree in the short term. I would say the tension is on the downside right now as those who hold Bitcoin have to capitulate to reset the price. “
“The VWAP anchored from the covid lows is pointing to a level of $ 27,000 below for short-term caution.”
“Based on historical seasonality, we enter one of the weakest months of the year next month with only a 20% win rate for August in the past 5 years,” he said. he adds.
Evaluate the probabilities
Jeff Dorman, Chief Investment Officer of the Asset Manager Arca, offered a third perspective.
“Bitcoin is a binary option. It’s worth either close to $ 0 or probably $ 10,000 billion (which implies around $ 500,000 / BTC), ”he said.
“Anything in between is just a path function based on whether the odds increase or decrease and when to reach one of those extremes. ”
“Earlier this year, those odds rose as inflation talk rose, corporate treasurers bought and Elon Musk gave retail traders confidence,” Dorman said.
“Over the past three months, those odds have decreased with Elon’s withdrawal, ESG fears have increased and China has cracked down,” he said.
“Traders can use whatever gibberish they want about ‘stress’ and ‘pushes’, but the reality is, it just doesn’t make sense about how you gauge the odds.”
Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, and EOS.