Bitcoin’s price has been trapped in an area of area-bound trading for the past few days. The support at $ 18,000 and the resistance at $ 19,000 resulted in the formation of a new and intense trading range.
The sideways trend has favored altcoin bulls heavily as Ethereum and many other digital assets have seen massive gains in the past few days.
These momentum shows few signs of slowing anytime soon, and some believe that Bitcoin’s consolidation will bring funding rates back to neutral before the cryptocurrency begins the next leg of its upward journey.
Looking at Bitcoin’s macro price trend, the cryptocurrency now has a significantly better risk-adjusted return than gold, which strengthens its status as a safe haven.
If this trend continues, the portrayal that it is an emerging safe haven asset could gain further momentum and potentially attract a host of new investors.
Combine that with the “FOMO” that kicks in as soon as the crypto breaks above $ 20,000, and there is a good chance there will be massive momentum soon in the days and weeks to come.
Bitcoin is entering the consolidation phase as new trading area forms
At the time of writing, Bitcoin is trading marginally at its current price of $ 18,300. Here has been trading in the last few days.
The $ 19,000 selling pressure has proven too great for bulls to break. Every visit at this level resulted in severe rejection.
There’s massive support around – and just under – $ 18,000 that has bolstered price action recently, with any decline in this region being quickly absorbed.
On-chain analyst: BTC has better risk-adjusted returns than gold
While Bitcoin’s risk-adjusted returns are viewed over a macro horizon, it far outperforms counterparts like gold and other assets.
This gives some validity to the safe haven narrative that has largely underpinned its recent surge.
An on-chain analyst spoke about it in a tweet today. saying::
“Bitcoin is more stable than gold as an investment vehicle. If you are into this long term, you want long term stability in returns for the risk you are taking. Daily price volatility takes a back seat for long-term investors. “
Image Courtesy of Willy Woo.
As Bitcoin approaches new all-time highs, it remains to be seen whether this narrative is enough to see a sustained rally.
Featured image from Unsplash. Charts from TradingView.