The crypto market is currently in a prolonged consolidation phase, with the overall market cap nearing $3 trillion. Analysts are watching closely for a potential Bitcoin (BTC) breakout, which could drive the market higher.
It has been noted that markets have remained largely range-bound over the past week, setting the stage for a potentially explosive move higher.
On Thursday, Bitcoin traded close to $95,000, while ether (ETH), BNB Chain’s BNB, and Solana’s SOL showed little movement. XRP and Cardano’s ADA declined by 2%, and dogecoin (DOGE) dropped by 3%.
On Wednesday, a loss of $56 million was reported for spot Bitcoin exchange-traded funds (ETFs), ending an eight-day streak during which nearly $3 billion had been invested in these U.S.-listed products.
It is believed by some that the markets have remained generally range-bound over the past week, potentially setting the stage for an explosive upward move.
It was stated by Alex Kuptsikevich, FxPro’s chief market analyst, in an email that long consolidations typically accumulate strength for further movement, with the next major trigger likely to be the labor market data on Friday.
It was added by Kuptsikevich that for the past five days, the market has fluctuated within a very narrow range, with some tendency toward shallower declines. However, it has been unable to surpass its 200-day moving average, which is currently passing through $3.01 trillion. A global positive is needed for a breakout, but it would open the way to the $3.5 trillion area, with strong movements in altcoins anticipated.
The sentiment was mirrored by Pat Zhang, head of research at WOO X. It was stated that volatility continues to be experienced by BTC, which has been forming a consolidation range between $93,000 and $95,000 since April 25, building momentum for a potential breakout, as mentioned in a Telegram message.
It was added by Zhang that the average funding rate for BTC has been negative over the past week, which is unusual, indicating significant whale activity both on and off exchanges.
Over the past two years, negative financing rates for bitcoin contracts have been recorded only four times, specifically from Sept. 19 to Sept. 22, 2023, Oct. 20 to Oct. 27, 2023, Aug. 16 to Aug. 24, 2024, and Sept. 10 to Sept. 17, 2024.
It was noted by Zhang that after these periods of negative financing rates, strong upward trends in BTC were experienced, suggesting that whale accumulation may be positioning BTC for a potential upward move.
Macroeconomic sentiment remains affected as the next steps by President Donald Trump in the ongoing tariff disputes are closely watched by traders worldwide.
According to Bloomberg, it was acknowledged by Trump on Wednesday that his tariff program faced a perception issue and posed significant political risks, but he remained committed to moving forward. He stated that “potential deals” with South Korea, India, and Japan were already in progress, and a deal with China was advancing in his favor.
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