New research is predicting that Bitcoin (BTC) “consolidation” could end by July as optimism about a BTC price breakout returns.
In its latest market update on June 2, trading firm QCP Capital revealed a bullish bias on both Bitcoin and the largest altcoin, Ether (ETH).
QCP Capital: Bitcoin consolidation “went perfectly”
Bitcoin price has been floating between $26,000 and $31,000 since mid-March, but analysts increasingly expect sideways movement.
QCP Capital is one of them and predicts a course change already at the end of the month.
This is thanks to the disappearance of the “side effect” of the US debt ceiling, leaving Bitcoin largely mimicking its 2020 consolidation and breakout phase.
“With the passage of the Debt Ceiling Act through the House and Senate, extending the ceiling until January 2025, we can all move forward now and not have to worry about any political side issues until next year’s US Presidential election,” it said it in it.
“This means we’re now going back to our regular programming of proper macro and crypto narratives.”
For QCP, price levels may be different, but the underlying behavior in 2023 is the same as it was at the start of the coronavirus pandemic.
Then the Federal Reserve unleashed a whopping $4 trillion in liquidity, buoying risk assets and eventually propelling Bitcoin to new all-time highs.
“In March 2020, we were on the verge of a massive price drop below 5,000 when the Fed opened the liquidity tap, leading to an exponential price increase as we neared the halving cycle the following year,” she wrote, citing a previous issue of her newsletter- Just Crypto series.
“Similarly in March 2023, risk aversion from the banking crisis saw us on the verge of breaking BTC below 20,000 when the Fed again triggered the liquidity injection to propel us back above 30,000 as we approach the next halving cycle of the year.”
Should the relationship continue to develop, the next phase is obvious – a dramatic exit from the trading range, with QCP positioning long options games.
“This consolidation has worked perfectly so far, but we expect to be nearing the end sometime this month. Therefore, we recommend positioning here for an upcoming big move through long 3m and 6m strangles with a bias to the long-call side,” he added.
An attached chart shows that the month of June is a hotspot for BTC and ETH volatility as of 2019.
3-month at-the-money volatility chart for BTC, ETH (screenshot). Source: QCP Capital
Betting on a BTC price breakout
As Cointelegraph reported, other signals from Bitcoin suggest that a new paradigm is about to take over.
Related: Bitcoin falls to $26.5K, but traders see chance of ‘bullish surprise’
This includes an on-chain metric tracking hodler behavior that sent BTC/USD into a “transitional phase” away from “capitulation” and onto the path to “euphoria” late last month.
Meanwhile, several market participants are arguing that BTC price action is at a critical stage and a decision on how to proceed is now due.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD trading near $27,000 on the day, ending May down 7%.
BTC/USD 1-day candlestick chart on Bitstamp. Source: TradingView
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This article does not contain any investment advice or recommendations. Any investment and trading venture involves risk, and readers should do their own research when making their decision.
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