One analyst mused this possibility in a tweet, pointing to striking similarities between Bitcoin’s recent price action and that seen in years past.
It is also possible that this consolidation phase will ultimately provide BTC with the fuel needed to sustain its next uptrend. Another analyst recently noted that the next breakout movement will result in a cascade of liquidations, which will help fan the flames of the next trend. Assuming this next breakout favors buyers, a sell-side liquidation cascade could cause a violent upwards movement – similar to the liquidation-induced meltdown seen in early-March.History Shows Bitcoin is on the Cusp of Entering Its Next Bull Phase
Bitcoin’s recent price action has done little to lend itself towards understanding the current state of the crypto’s macro trend.
BTC has largely been hovering between $9,000 and $10,000, with this trading range narrowing significantly throughout the past several weeks as it now trades around $9,200. This has led the crypto’s volatility to reach a historic low, which seems to suggest that a significant movement is brewing. In the past, bouts of volatility this low have been followed by movements of 30% or greater. There is a strong possibility that a similar type of move will ensue once Bitcoin starts developing a more definite trend. While speaking about Bitcoin’s historical positioning, that he is firmly bullish on the benchmark cryptocurrency. He offered a chart showing that the cryptocurrency tends to consolidate following its mining rewards halving, with this phase ultimately resulting in it entering a fresh parabolic cycle.Image Courtesy of Bitcoin Jack. Chart viaIf history does repeat itself – and there’s no guarantee that it will – the cryptocurrency could be well-positioned to see some notable upside towards the end of the year.
What Could Help Fuel This Next Parabolic Movement?
As for what could fuel this potentially parabolic movement in the coming months, one analyst recently noted that Bitcoin is likely to see a “cascade” of liquidations once this trading range breaks.NewsBTC reported on this possibility yesterday, citing the analyst who said:
“Bitcoin is so compressed that any break likely will get the dominoes falling. Even intraday stop clusters hitting should be enough to carry into the longer-term position areas to get the cascade going.”That being said, bulls must gain control of the crypto in the near-term, as an upwards breakout could create a massive influx of sell-side liquidations that helps to drive Bitcoin’s price higher.
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