2-Month Stagnant Bitcoin Price Action: Report

Market analysts at Bitfinex said that despite the excitement over the recent halving in the cryptocurrency market, Bitcoin may be entering a period of price stabilization that could last up to two months.

The report suggests that Bitcoin will continue to set the pace of the cryptocurrency market through May and will remain an important indicator of the sector's overall market value.

Bitcoin price action will decrease

Bitfinex analysts emphasize that now, unlike previous cycles, consumers and businesses have more information about the economic fundamentals that influence market trends.

This knowledge could lead to a one to two month consolidation phase for Bitcoin. As a result, prices can vary, which can reach up to $10,000 in both directions.

“Bitcoin has historically recovered in the first weeks after the previous halvings, it takes a few months for the new supply to show up in the price. In this instance, it can be argued that the stability of Bitcoin's price is based on investors' confidence in the asset and their reluctance to sell,” Andrey Stoychev, head of prime brokerage at Nexo, told BeinCrypto. .

Moreover, the expected slowdown follows Bitcoin's massive market dominance. The liquidity seems to be decreasing as it turns to altcoins.

This change is said to be due to the halving of the supply of new BTC. Historically, it increases investor appetite and turns attention to altcoins.

“The 57 percent level in BTC.D represents a significant technical and psychological indicator based on historical data. Once Bitcoin's dominance reaches this level, market sentiment and capital flow will tend to decline sharply indicating a shift from Bitcoin to altcoins. Last week's halving Subsequently, we saw BTC.D reach 57 percent and fall sharply,” Bitfinex analysts wrote.

Read more: Half a story of Bitcoin: Everything you need to know

Moreover, market specialists closely monitor Bitcoin derivatives. The recent reduced implied volatility suggests a quiet summer ahead for Bitcoin.

“Summer is usually a period of low volatility, and traders start to allocate accordingly based on bias,” said Jag Kuner, Head of Derivatives at Bitfinex.

Read More: Bitcoin Price Prediction 2024/2025/2030

As the market adjusts on the half and economic indicators, investors are advised to follow these developments closely. They should monitor liquidity changes and market sentiment, which could determine the pace for the rest of the year.