Bitcoin might be on the brink of a gigantic rally
Bitcoin started 2024 with a new all-time high, the result of the much-awaited ETF approval on January 10th. According to Binance, it remains the most important crypto in the marketplace, far ahead of the altcoins in terms of market capitalization. Yet that doesn’t mean the Bitcoin price USD prediction wasn’t at all impacted by changes and corrections. Despite the arrival of the halving, the price remained somewhat stagnant. And while many investors and analysts believe this is in accordance with historical data, past halvings have shown that it takes a few months for price growth to start picking up speed. Others are somewhat disappointed that there are no signs of a rally in sight at the moment.
Yet, recent figures and analysis might challenge that notion, as the numbers appear to indicate that price evolution is likely to occur soon and be quite considerable as well.
Consolidation
In the crypto world, the term consolidation refers to a period during which an asset moves between two different levels. This typically occurs when the market is indecisive about the next move and the trajectory of the prices, but after there’s a break either above or below this level, the consolidation phase can, and a new trend is ready to take its place. At the moment, investors say that Bitcoin is entrenched in its most extensive period of consolidation, as it has lasted well over 90 days and appears to remain ongoing.
The general consensus is that the steadiness could be the sign of an upcoming rally of significant proportions, a belief stemming from historical data and past price movements. Previously, when there was considerable consolidation over a prolonged period, the price expansion that followed was just as impressive. The one taking place right now is the largest in all of Bitcoin’s history. This would also be in line with the fact that 2024 was predicted to be a great year for cryptocurrencies as a whole.
If BTC’s price succeeds in reaching and securing a new all-time high, then digital gold will make history and boost its appeal to investors. As such, investors have little else to do but wait until Bitcoin breaks out of this range, and then a rally will only be a matter of time. Four years ago, during the 2020 Bitcoin halving, a 21-day consolidation propelled the value to $69,000 by November 2021, at the time the highest level BTC had ever had.
Investing plans
Given this data, most investors naturally wonder how they should act during this time. In a marketplace as challenging and difficult to pin down as that of crypto, traders must always have a solid plan that can protect their portfolios and allow room for flexibility at the same time. And since it is pretty much impossible to predict price movements with 100% accuracy, the best bet participants have is to rely on estimates, charts, and historical numbers.
The same plan of action will be implemented by most during these pre-rally days as well, with the general consensus being that it will still take a while until the consolidation phase, which started on March 13th, is over. During this time, the volatility and trading volume are lower than they generally are, which shows up in Bitcoin’s general performance. Since the king of crypto reached a new all-time high, it decreased and has been trading within a 26% range ever since.
On May 2nd, the price went to $58,253, the lowest point it recorded since the beginning of 2024. Yet, this was only a brief occurrence, and gains began accumulating almost straight away, taking Bitcoin roughly $10,000 higher. Some forecasts show that the consolidation could extend well past the summer into September or even October. Others think that even these days show the earliest time when the rally is supposed to begin and that it could potentially take even longer than that.
These months have been considered on account of the seasonality of the Bitcoin market, a series of estimations based on historical data highlighting which months of the year are most likely to bring the largest gains and which are more likely to present with losses. The data suggests that it might take Bitcoin at least four or five more months before it is fully consolidated. Some analysts have likened Bitcoin’s performance to that of gold, as the latter has been forming a cup-and-handle pattern over the past thirteen years.
This pattern takes place in the immediate aftermath of a bullish trend and typically predicts the emergence of an upward period in the future. The cup phase of this market movement, during which the price returns to the previous peak, lasted approximately four years. Researchers believe that BTC is showing the same chart patterns at the moment, showing that there is, in fact, a practical basis for calling Bitcoin “digital gold.”
Central bank
There’s also good news for Bitcoin coming from the Central Bank of Ireland, which has approved several virtual asset service providers on June 7th. These entities carry out exchanges and transactions in both virtual assets and fiat currencies. Some of their other features include the transfer of virtual assets, as well as their administration, and some platforms can also oversee sales made by an issuer’s office. Company representatives have shown their commitment to fully complying with the country’s rules and continue pushing for further innovation in the sector.
The arrival of an official approval also means that the consumers will benefit from larger product offerings and more comprehensive features, characteristics that investors are always looking forward to due to their potential for profitability. As a result, Ireland has now approved more than ten entities as VASPs, with seven companies on the list receiving their approvals back in 2023. However, there are also crypto businesses that chose to leave Ireland this year. The company behind the largest stablecoin in the world announced its plans to leave the country and return to the United States.
BTC is still working to consolidate its price, but most investors are convinced that after this period is over, digital gold will experience some of the most consistent growth rates in its history. As an investor, you need to keep an eye out on the market changes in order to be prepared.
