Bitcoin (BTC) has been trading within a narrow range this week, fluctuating between $68,350 and $71,500 as traders remain uncertain about the next market direction.
Looking at the daily chart, it appears that Bitcoin is currently experiencing a period of price stability within a Bull Pennant formation. This is a bullish continuation pattern that occurs when the price fluctuates within a symmetrical triangle range after a strong uptrend. The pattern consists of three phases: pole formation, consolidation, and breakout.
As of March 29, Bitcoin has entered the consolidation phase of the bull pennant pattern. This indicates that traders are evaluating the sustainability of Bitcoin’s bullish trend. The reduced market activity, as reflected in declining trading volumes, supports this observation.
The current sideways movement of Bitcoin aligns with a shift in BTC holdings from smaller investors (referred to as “sharks”) to larger investors or “whales.” The number of addresses with holdings between 100-1,000 BTC (sharks) has been decreasing since March 12, while the number of whale accounts has been increasing. This redistribution of BTC from sharks to whales may contribute to market stability and potentially lead to a gradual price increase, as whales tend to be long-term investors less likely to sell their holdings.
If whales are accumulating BTC in anticipation of future price increases, their activity could foreshadow bullish market trends.
In terms of price movement, Bitcoin is expected to continue trading within the bull pennant formation in the near term. However, according to technical analysis, the price may break above the upper trendline of the range and target $97,600 by May.
On the weekly timeframe chart, Bitcoin’s relative strength index (RSI) suggests that the market is overbought, which raises the possibility of further consolidation or a correction in the coming weeks.
With the halving event just a few weeks away, Bitcoin’s price could potentially correct or consolidate within the 1.00-0.786 Fibonacci retracement level range, around the $69,300-67,850 area.
It’s important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research and analysis before making any decisions.