Bitcoin price is currently trading in a very narrow range between $59,000 and $60,000 for five consecutive days.
At the time of writing, Bitcoin price is at $58,450, down 0.06% since it opened early Wednesday in Asian trading.
While this may seem calm, some analysts are warning that it could actually be a sign of a larger price movement, particularly to the downside.
According to FxPro market analyst Alex Kuptsikevich, a similar narrow price movement pattern occurred in 2024 when Bitcoin traded between $55,000 and $70,000 before continuing its rise.
However, this time the situation is different as Bitcoin is currently below key support levels as well as below the 50-day and 200-day moving averages, which are usually considered indicators that the market is still in a downtrend.
He explained that this situation is more dangerous for investors who are expecting a price increase.
If Bitcoin fails to defend the current range and the price breaks down, the next downside target could potentially approach $40,000.
On-chain data from CryptoQuant also shows worrying signs.
Some long-term Bitcoin holders have started selling their holdings despite losses.
In previous market cycles, such situations often signal a ‘capitulation’ phase, when investors start to give up before the market finally finds a new bottom.
At the same time, demand for Bitcoin is also still weak.
The number of active addresses and network transactions remains low, indicating that investor interest in buying Bitcoin has not recovered.
Market sentiment was also affected by developments involving Strategy, the world’s largest corporate Bitcoin holding company.
The company’s shares fell sharply after announcing the possibility of selling more than $1 billion in Bitcoin to strengthen its financial position.
The move was seen as contradicting the stance of its founder, Michael Saylor, who was previously known for his slogan ‘will not sell Bitcoin’.
In addition, macroeconomic factors continue to put pressure on the crypto market.
The strengthening of the US dollar has led investors to shift to assets considered safer, while a large portion of investment capital is now flowing into the stock market, driven by the explosion of artificial intelligence (AI).
