Bitcoin Consolidation Expected After Recent Pullback
Bitcoin's recent price pullback, occurring amidst broader macroeconomic uncertainty, may result in a slower-than-expected return to its January all-time high (ATH) of $109,000, according to analyst XBTManager of CryptoQuant.
Consolidation Phase Anticipated
In a March 5th note, XBTManager stated, "We should assume that we are in the pullback phase after the ATH and will likely continue to consolidate for some time due to liquidity needs."
Long Bitcoin Bids: A Cautious Outlook
XBTManager suggests that long Bitcoin positions will only become viable once short-term holders (those holding for under 155 days) begin selling and long-term holders resume buying. Until this shift occurs, traders are advised to exercise caution and avoid high-risk trades.
"Over the next few months, caution is advised, and highly risky trades should be avoided."
The analyst highlights that the period leading up to Bitcoin reaching $109,000 on January 20th saw an increase in supply from short-term holders and a reduction from long-term holders. This selling pressure contributed to the subsequent price drop. A similar trend was observed in December when Bitcoin initially broke the six-figure mark. Data from Bitbo indicates a significant decrease in long-term holder supply since December 1st, from 15.2 million BTC to 14.4 million BTC at the time of writing.
Bitcoin's price fell below $100,000 in early February and further dropped to $85,000 on February 27th following confirmation of new US tariffs. The asset later dipped below $80,000, wiping out gains achieved after the US presidential election in November. At the time of publication, Bitcoin is trading around $87,100 (according to CoinMarketCap).
Disclaimer: This article does not provide financial advice. All investment decisions involve risk, and readers should conduct thorough research before making any investment choices.
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