The current boring crypto market could last between one to six months, and the sentiment will be the most negative right before the turnaround, one hedge fund manager said.
The crypto markets have entered a phase of stagnation, with digital assets consolidating over the past few weeks, prompting investors to question whether the bullish trend will resume.
Efforts to initiate a sustained rally in recent weeks have been met with selling pressure, with the most recent occurrence happening on Friday, as bitcoin (BTC) experienced a nearly 5% decline from $63,000 to slightly above $60,000. This downturn occurred amidst concerns regarding inflation and hawkish statements from Federal Reserve policymakers.
Furthermore, blockchain activity indicates subdued participation, with transactions on the Bitcoin network witnessing a significant decline, while the second-largest cryptocurrency, ether (ETH), has shown signs of inflation.
This current scenario echoes the market dynamics observed from April to September 2023 when bitcoin remained range-bound between $25,000 and $30,000 for a prolonged six-month period. Eventually, cryptocurrencies managed to embark on a multi-month rally, culminating in BTC reaching an all-time high in March of the following year.
Charles Edwards, the founder of crypto hedge fund Capriole Investment, described the current phase as “Bitcoin is in the ‘bore you to death’ phase.” He anticipates a potential consolidation period lasting from one to six months, characterized by BTC trading within a defined range with minimal volatility until market participants lose patience. Edwards believes that sentiment will be at its most negative just before the consolidation phase concludes.
According to analytics firm Santiment, indications suggest that the market might be nearing a bottom. Traders are displaying weak interest in “buying the dip” during bitcoin’s recent retracement, as observed from social media interactions. This sentiment underscores a cautious approach among traders amid ongoing market uncertainties.
