#Bitcoin has been consolidating within a narrow range for about 7 months. During consolidation phases, price movements are typically horizontal, making it difficult to predict the direction and profit from it. So, how should we approach these phases?
Strategy During Consolidation
Consolidation periods are uncertain, but there are two key ranges to focus on:
- Safe Zone ($49,000 - $52,000): This range is more suitable for buying.
- Risky Zone ($69,000 - $74,000): This is the ideal range for selling.
The range between $52,000 and $69,000 is highly uncertain. Price movements in this area can seem irrational, making it challenging to execute accurate trades. Therefore, it might be wiser to wait for the price to break out of this range into either the safe or risky zones for more secure trading opportunities.
Neutral Level: $60,000
During consolidation, there’s often a neutral level where the trading volume is the highest. Currently, this level is around $60,000. If the price stays above this neutral level, the market sentiment can be seen as positive, whereas staying below this level indicates a more negative outlook. If Bitcoin closes daily above $60,000 with high volume, there’s a higher likelihood of the price pushing towards the risky zone. #BinanceLaunchpoolHMSTR
Quick Summary: Buy or Sell?
- Wait for safe or risky zones: If you prefer less risky trades, wait for the price to enter the safe ($49k - $52k) or risky ($69k - $74k) zones. You could try buying in the safe zone or shorting in the risky zone. If the price breaks above the risky zone, the uptrend is likely to continue, whereas breaking below the safe zone suggests further downside. #Binance
- For risk-takers: You can open trades within the $52k - $69k range. If the price breaks above $60,000 and holds, it’s likely to head towards the $69k - $74k area, offering an opportunity for buyers with a higher risk appetite.
Conclusion
This analysis can serve as a guide during periods of consolidation when market conditions are uncertain. When Bitcoin was at $44k, a similar analysis helped us capture a 70% increase, rising to $74k. I’ll continue to share these types of trading plans as the market moves forward. If I see any important signs of a breakout or breakdown, I’ll update you with the reasons behind the moves.
I hope this has been helpful.