Despite the excitement over the recent decline in the cryptocurrency market, Bitcoin could enter a period of price stability that could last up to two months, according to market analysts at Bitfinex.
The report notes that Bitcoin will continue to set the tone for the cryptocurrency market through May and will remain a decisive indicator of the sector's overall market capitalization.
Bitcoin price movement will slow down
Confirmed Bitfinex analysts say consumers and businesses are now better informed about the economic fundamentals that influence market trends, unlike previous cycles.
This knowledge could lead to a 1-2 month consolidation phase for Bitcoin. As a result, prices can fluctuate, up to $10,000 in either direction.
The expected recession follows Bitcoin's peak market dominance, which appears to be diminishing as liquidity shifts to altcoins. This change is due to a decrease in the new supply of BTC Half. Historically, it strengthens investors' appetite for risk and diverts attention towards... Alternative currencies.
“The 57% BTC.D level represents an important technical and psychological benchmark based on historical data. Once Bitcoin's dominance reaches this level, it tends to face sharp rejection, indicating a change in market sentiment and capital flows from Bitcoin to altcoins. After last week’s halving, we saw BTC.D hit 57 percent and then decline sharply through that,” Bitfinex analysts wrote.
Additionally, market professionals are closely monitoring Bitcoin derivatives. The decline in implied volatility observed recently indicates a calmer summer for Bitcoin.
“Summer periods are generally not very volatile and traders begin to position themselves accordingly based on their bias” He said Jag Conner, Head of Derivatives at Bitfinex.
Learn more: Bitcoin (BTC) Price Forecast for 2024, 2025, 2026, 2027
As the market adjusts to the halving and economic signals, investors are advised to monitor these developments closely. They should monitor changes in liquidity and market sentiment that could dictate the pace for the rest of the year.
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