Bitcoin price has now traded sideways for nearly two full months. The price action has crypto traders bored, and volatility reaching record lows. Analysts everywhere are expecting a major move soon, if not any day now.
However, data comparison between the current trading range and the range prior to the previous bull market, says otherwise.
Stagnant Sideways Bitcoin Price Action Leaves Crypto Analysts Expecting Major Breakout
When investors first get into cryptocurrencies, the first piece of advice they often receive is to never invest more than they can afford to lose.
It is one of the few asset classes that comes with a warning of complete loss. It is due to the explosive and extreme volatility that the asset class is notorious for that these warnings exist.
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However, the recent price action in the crypto market is uncharacteristic of Bitcoin and its altcoin cousins. Volatility is at record lows, and most assets are trading sideways just below resistance.
The stalemate has analysts confused, predicting a major move and decision on trend for days to come when the breakout does arrive.
But comparison data shows that the breakout everyone is waiting for may take a lot longer than expected. Worse yet, the trading range may get even tighter, and more boring before the breakout arrives.
Bitcoin Max Intraday Move 2020 | Source: Messari
Past Cycle Data Points To More Boredom in the Days Ahead As Trading Range Tightens
Markets are cyclical, and historic recurrence suggests that the same events often repeat albeit at different times. Past cycles can often shed light as to what to expect during current cycles.
A then and now data comparison between the current trading range and the one ahead of Bitcoin’s last bull run is concerning.
Bitcoin Max Intraday Move 2015-2020 | Source: Messari
The boredom currently shaking out traders from Bitcoin, may continue for a lot longer than anyone expects. Some Bitcoin experts claimed this process could take over 100 days and warned investors to mentally prepare.
However, during the last cycle, sideways price action and a tight trading range lasted a lot longer and became more pronounced.
The variance in the above chart is a lot tighter coiled during 2015 and 2016 than it is now, suggesting things can become more stagnant.
There’s no denying, however, that when the sideways trading does break, fireworks will follow.
Consolidating below resistance often suggests a move about that key level. But other past cycle comparisons could point to downside instead.
Whichever direction chooses from this point on, will define a longer term trend. Bulls will need to show more strength to ensure its a long-term uptrend, rather than a fall into a deeper downtrend for crypto.