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Bitfinex Warns: Bitcoin (BTC) May Be Entering a Consolidation Phase
As the price of Bitcoin (BTC) continues to hover around $100,000-$110,000, analysts at Bitfinex are sounding the alarm. They believe that the market may be on the cusp of entering a consolidation phase.
The report highlights a dramatic surge in the value of Bitcoin from roughly $74,600 in early April to over $107,000. However, since then, it has been stuck trading within a narrow range between $100,000 and $110,000, indicating a shift away from rapid gains towards sideways consolidation.
Several key metrics underscore this transition. Spot volume on major exchanges is waning, while taker buy pressure has softened. This suggests that buyers are stepping aside at these elevated levels, leading to an environment less conducive to further upward momentum.
Furthermore, short-term holders are taking profits around the $98,700 realized price threshold, draining aggressive upside fuel.
Historical seasonality reinforces this consolidation argument. Quarter three (Q3) consistently has been Bitcoin’s least strong quarter, characterized by low returns and trading within a limited range.
On the macro front, U.S. consumer spending has slowed down, core inflation persists above target levels, and rate cuts are not anticipated anytime soon. Mixed economic signals, including a cooling labor market and widening trade deficits, have traders preparing for a mild volatility lull before any fresh directional push.
Notably, institutional demand continues to grow, as demonstrated by spot ETF inflows surpassing $4.6 billion in just two weeks. This could potentially underpin price stability, even as momentum fades.
The analysts at Bitfinex also note that all eyes will be on July’s Federal Reserve policy decision, where a dovish surprise could reignite buying pressure and enable Bitcoin to break out of its current range. If institutional demand remains strong and long-term holders pause their profit-taking activities, Bitcoin may escape its present trading range and renew its upward trajectory.
The article concludes by stating that while the market appears to be shifting away from rapid gains towards sideways consolidation, significant ETF inflows and a potential dovish Fed decision could still reignite Bitcoin’s upward momentum.
Source: crypto-economy.com
