Bitcoin prices have been in a severe slump lately. They trade within a narrow range for many weeks.
The digital currency has remained between $30,000 to $42,000 since May end, coinDesk figures reveal.
Despite this, market observers believe that the digital currency could not only break out of its current range but also experience significant upside.
[Ed Note: Investing cryptocoins and tokens is highly risky as the market is not regulated. It is possible to lose all of your investment.
Oliver von Landsberg–Sadie, CEO of the payments company BCB Group recently spoke out.
He stated that all the analysis on-chain suggests that we are at the end of a slingshot. CoinDesk.
“It’s quiet right now, but don’t confuse that with lack of interest.”
Potentially Exorbitant Gains
Scott Melker, a crypto analyst and investor, was kind enough to share his thoughts.
He noted that the Bitcoin price had been steadily consolidating between 42K to 30K for more than 8 weeks with decreasing volume, volatility and liquidity.
The expected growth in volume and volatility when an asset’s price consolidates is greater the longer it takes. This has been proven numerous times with Bitcoin so we expect that the next move is explosive,” said Melker.
“On-chain analysis shows that supply is being transferred between impatient speculators and Bitcoin whales with large bitcoin wallets, with new wallets sold and older, larger wallets bought.”
“This theory suggests that smart money is building wealth ahead of the next big move to the upside.”
Jake Wujastyk (chief market analyst at TrendSpider) offered a different point of view. He stated that:
“I disagree in the short term. I believe the tension is to the downside right now, as Bitcoin holders need to surrender to reset the price.
“The anchored VWAP at the covid lows points towards a level of $27k above to be watched out for the short-term.
He said, “Based on historical seasonality, next month will be one of the most difficult months in the year with only 20% of August’s win rate over the past 5 years,”
Jeff Dorman, chief investor officer at asset manager Arca offered a third perspective.
“Bitcoin” is a binary option. He stated that it is either worth $0 or worth $10 trillion, which would translate to roughly $500k/BTC.
“Everything in-between is just a path function that depends on the probability and timing of hitting one of these extremes.”
Dorman stated that earlier this year, these probabilities rose as inflation talk increased, corporate treasurers bought, and Elon Musk gave confidence to retail traders’.
He stated that “Over the past three month, these probabilities fell as Elon pulled away, ESG fear sprang up and China cracked down.”
“Traders have the freedom to use whatever mumbo-jumbo about ‘tension’ or ‘breakouts they like, but it doesn’t really matter compared with how you evaluate probabilities.