Bitcoin Is In a ‘Bore You to Death’ Phase, but Bottom Could Be Close, Analysts Say

Crypto
markets
are
stuck
in
a
lull
with
digital
assets
consolidating
for
the
last
few
weeks,
testing
investors
conviction
whether
the
bull
market
will
resume.

All
attempts
for
a
sustained
rally
over
the
past
weeks
have
been
sold
off,
the

latest
instance
coming
Friday
with
bitcoin

(BTC)
tumbling
nearly
5%
from
$63,000
to
just
above
$60,000
amid

discouraging
inflation
expectations
and
hawkish
commentary
from
Federal
Reserve
policymakers.

Blockchain
activity
also
points
to
low
participation,
with

transactions
on
the
Bitcoin
network
falling
off
a
cliff
and
second-largest
ether

(ETH)
turning
inflationary.

We
have
been
here
before.

The
current
period
resembles
the
action
from
April
through
September
of
2023
when
bitcoin
was
stuck
in
the
$25,000-$30,000
range
for
an
excruciating
six
months.
Eventually,
cryptocurrencies
were
able
to
sustain
a
multi-month
rally,
with
BTC
ultimately
hitting
an
all-time
high
in
March
of
this
year.

“Bitcoin
is
in
the
‘bore
you
to
death’
phase,”
Charles
Edwards,
founder
of
crypto
hedge
fund
Capriole
Investment
said
in
an

X
post
Thursday.

This
period
of
consolidation
could
last
for
anywhere
between
one
to
six
months,
he
explained,
during
which
BTC
will
be
rangebound
with
low
volatility
until
market
participants
lose
their
patience.
The
sentiment
will
be
the
most
negative
just
before
the
consolidation
ends,
he
added.

“When
you
are
sufficiently
bored
from
sideways
chop,
common
symptoms
will
include
thinking
the
halving
is
priced
in,
the
bull
market
is
over
and
selling
to
buy
stocks
at
the
bottom,”
Edwards
said.
“Your
symptoms
and
shorts
will
peak
just
before
the
mega
rally.”

Said
bottom
might
be
near,
according
to
analytics
firm
Santiment.

“Traders
are
showing
weak
‘buy
the
dip’
interest
in
bitcoin’s
latest
retrace,”
Santiment

said
Friday
monitoring
social
media
interactions.
“Generally,
the
crowd’s
lack
of
faith
is
a
strong
sign
of
prices
being
close
to
a
bottom.”

Bitfinex
analysts
noted
in
a
Friday
report
that
bitcoin’s
recent
weakness
happened
amid
a
surging
U.S.
dollar
with
interest
rate
cut
expectations
tempered,
and
said
the
lull
could
continue
into
early
summer.

“We
expect
the
market
to
remain
uncertain
over
the
short-term
in
a
low
volatility
environment
till
the
actual
tapering
of
QT
[quantitative
tightening]
takes
place
in
June.”
The
Federal
Reserve
announced
plans
to
curb
the
pace
of
its
balance
sheet
run-off
starting
next
month,
which
would
impact
dollar
liquidity
positively
benefitting
risky
assets
such
as
cryptocurrencies
that
are
sensitive
to
the
global
liquidity
environment.

However,
the
greenback’s
tumble
from
a
six-month
peak
last
week
following
the
Fed
meeting
and
weak
jobs
report
–
coinciding
with
BTC
to
rebound
from
near
$56,000
–
was
a
turning
point
in
the
trend,
and
a
weaker
dollar
could
support
the
next
leg
in
the
crypto
rally.

“We
believe
sustained
strength
and
a
reclaim
of
range
lows
on
BTC
post-FOMC
and
job
market
data
and
the
simultaneous
weakness
in
the
dollar
is
a
sign
of
a
new
regime,
which
would
set
us
up
for
a
very
bullish
Q3-Q4
for
bitcoin,”
the
authors
said.