Big Move Coming for Bitcoin? The consolidation period is nearing its end, according to analysts

On July 21, prominent on-chain analyst Willy Woo said that there were early signs that the bitcoin consolidation was nearing completion.

The asset has been in a very tight range since last month. The longer-term view of four months also shows sideways trading within larger ranges.

Wu added that futures demand is currently driving the market, adding that “this demand is moving against the lateral price action (it is bullish).”

There are early signs that the BTC consolidation is nearing completion (FSI chart below).

Futures demand is currently driving the market, with this demand climbing against the sideways price action (it is bullish).

Volatility dynamics are also indicating that a bigger move is likely. pic.twitter.com/WkmiQO0B17

— Willy Woo (@woonomic) 20 July 2023

Bitcoin Breakout Imminent?

The fundamental strength indicator of bitcoin has just turned up, and this is usually followed by a big move to the upside. “The volatility dynamics are also indicating the possibility of a bigger move,” Wu said.

Glassnode posted data on the Bitcoin Spent Output Profit Ratio (SOPR), which “remains within the profit-dominant regime.”

The current chart shows a similar pattern to the longer periods of sideways trading during the bear markets in 2016 and 2019. Both were followed by a major breakout as the markets moved into bullish territory.

The SOPR currently resides within a profit dominated setup, with a value recorded at 1.06, indicating that the average coin changing hand is locking in a 6% profit. Its characteristic is similar to both the 2016 and 2019 periods. pic.twitter.com/XxKalGLUq4

— Glassnode (@glassnode) 20 July 2023

However, it is still too early to call a change in trend as BTC has failed to break the resistance above $30K on three separate occasions in the past three months. Consolidation of the price at the resistance level usually leads to a decline in the support areas.

Furthermore, the asset declined back below $30K during the Asian trading session on Friday morning. At the time of writing, BTC was trading marginally down at $29,875, down 5% from the same time last week.

Elsewhere on the Crypto Markets

The total market capitalization is stable at $1.24 trillion at the time of writing. The market has been in a range of $1 trillion to $1.3 trillion since March, as even Ripple’s victories could not break them out of this channel.

However, on-chain activity shows that a slow and steady accumulation is still happening at these levels, and patient investors are still piling up.

Ethereum price also declined below the $1,900 level and was standing at $1,894 at the time of writing. ETH faced heavy resistance at $2,000 and is down 5.7% in the past week.

Most altcoins were in the red during Friday’s early session, with Ripple (XRP), Cardano (ADA), and Solana (SOL) down 3-5% each.

Polkadot (DOT), Uniswap (UNI), and Chainlink (LINK) were posting solid gains on the day.