Bitcoin's price has been oscillating between $65,300 and $68,400 for nearly 2 weeks, with the 2021 all-time high of $68,980 proving to be a formidable resistance level. Currently, BTC is trading at $66,678, reflecting a 0.36% increase amidst low trading volumes, indicating a prolonged consolidation phase. Let's explore the factors contributing to BTC's confined price range:
1. Tug-of-war between spot demand and supply
- Spot demand: Emerging between $65,000 and $62,000.
- Supply: Accumulating between $70,000 and $72,000.
- This creates a balance of power between bulls and bears.
2. Key support and resistance levels:
- Support: A strong zone between $60,000 and $66,000, where 2.34 million BTC were purchased by 4.9 million addresses.
- Resistance: A tough barrier between $66,500 and $70,000, with 2.94 million BTC bought by 5.2 million addresses.
3. Historically low volatility:
- The market is on day 96 of low volatility, the longest period in this cycle.
- The 5-day Historical Volatility Index is at 6.82, significantly lower than the 2021 peak of 42.7.
4. Failed attempts to surpass $70,000:
- Multiple efforts to break through $70,000 have not led to a sustained uptrend.
5. Evolving market narratives:
- US political discussions concerning the crypto industry.
- Anticipation of US-based spot Ethereum ETFs.
Although the market is currently in a state of consolidation, the crypto market's dynamics can change quickly. Traders should keep a close eye on on-chain metrics and technical indicators for any signs of a breakout.
Will we see a breakout soon, or will the consolidation continue?
