Bitcoin is in a “bored to death” phase, but the bottom may be near, analysts say

• BTC has been declining since reaching an all-time high in March.

• Friday’s rapid fall showed less interest from buyers at the lows, suggesting the bottom may be near, Santiment said.

• The calm could continue into early summer, setting up a very bullish second half of the year, Bitfinex analysts said.

Cryptocurrency markets are stuck in a lull as digital assets consolidate in recent weeks, testing investors’ belief in the bull market’s resumption.

All attempts at a sustained rally in recent weeks have been sold off last resort Friday coming up with bitcoin {{BTC}} slumping nearly 5% from $63,000 to just above $60,000 in between discouraging inflation expectations and aggressive comments from Federal Reserve policymakers.

Blockchain activity also indicates low participation transactions on the Bitcoin network falling off a cliff and the second largest ether {{ETH}} becoming inflationary.

We have been here before.

The current period is reminiscent of the action from April to September of 2023, when bitcoin was stuck in the $25,000-$30,000 range for an excruciating six months. Ultimately, cryptocurrencies managed to sustain a rally that lasted several months, with BTC eventually reaching an all-time high in March of this year.

“Bitcoin is in the ‘bored to death’ stage,” said Charles Edwards, founder of crypto hedge fund Capriole Investment. X post Thursday.

This period of consolidation could last one to six months, he explained, during which BTC will be limited to low volatility until market participants lose patience. Sentiment will be more negative shortly before the end of the consolidation, she added.

“When you are sufficiently bored of the sideways cut, common symptoms include thinking the halving is already priced in, that the bull market is over, and selling to buy stocks at the bottom,” Edwards said. “Your symptoms and your shorts will peak just before the mega rally.”

According to analytics firm Santiment, the bottom may be near.

“Traders are showing weak ‘buy the dip’ interest in bitcoin’s latest retracement,” Santiment She said Monitoring social media interactions on Friday. “In general, a lack of public confidence is a strong signal that prices are near the bottom.”

Bitfinex analysts noted in a report on Friday that bitcoin’s recent weakness came amid a rising U.S. dollar with tempered interest rate cut expectations, and said the lull could continue until the start of the ‘summer.

The story continues

“We expect the market to remain uncertain in the near term in a low volatility environment until QT tapering occurs [quantitative tightening] will take place in June.” The Federal Reserve has announced its intention to slow the pace of outflow from its balance sheet starting next month, which would have a positive impact on dollar liquidity to the benefit of risky assets such as cryptocurrencies that are sensitive to the global liquidity environment.

However, the greenback’s collapse from last week’s six-month high following the Fed meeting and weak jobs report – coinciding with BTC’s rebound from nearly $56,000 – was a turning point in the trend, and a weaker dollar could support the next leg of the trend. cryptocurrency rally.

“We believe the sustained strength and recovery lows on post-FOMC BTC and labor market data and concomitant dollar weakness are a sign of a new regime, which would set us up for a very bullish third-fourth quarter for bitcoin ,” the authors said.

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