Bitcoin Price Is Falling: Is It Time for a Long BTC Consolidation?
Bitcoin is one of the first decentralized cryptocurrencies, which helps in cross-border transactions. Unlike paper currencies, it is a digital currency stored in smartphones, computers, or other media storage devices. Many analysts think it is the future of currency, and that is why they treat it as an asset for the long term, like gold or oil.
However, many other analysts believe Bitcoin is more volatile than gold, so it is not an asset for the long term. It may come to zero in the future, which means it does not have real value.
Due to the uncertainty of the market, large cryptocurrencies such as Bitcoin and Ethereum see an outflow in number. Besides that, the incident of Terra (LUNA) also discourages people from investing in a decentralized asset for the long term.
Bitcoin runs on a Proof of Work consensus, which is not eco-friendly because it uses more power for mining. Besides that, it also faces issues with scalability and higher transaction fees.
On the other hand, Ethereum will switch from Proof of Work to Proof of Stake consensus, which will benefit the system in the long run. There is no such news for Bitcoin Protocol. BTC led the rally in the last two years, but it does not mean it will lead the rally after the consolidation phase. Visit here for more details about the future Bitcoin prediction.
At the time of writing, BTC was trading around $29,971. In the last few months, it has been consolidating between $45K and $32K.But after the market crash of May, it is trading below the support level.
The MACD indicator and RSI reflect bullishness in the short term, but Bollinger Bands lacks volatility. After analyzing the technicalities in the short term, we think BTC will consolidate and might not see any upside or downside rally, at least in the next few weeks.
Although the long-term weekly chart seems good, the BTC’s price has broken the strong Support Level of $32K. It means BTC will regain its level; otherwise, it will fall further. If it falls, the next support level will be hard to predict.
We have to wait for a few more months before it takes another support. However, if it does not fall, then traders may accumulate some coins for the long term.
Bitcoin is a popular asset, and many people hold it for the long term. On the weekly chart, the MACD indicator is forming red histograms, and RSI shows bearishness in the market. The recent weekly candle is forming an inverted hammer in the lower range of the Bollinger Bands.
If you trust Bitcoin, you can accumulate some coins, but technically it is not the ideal time for long-term investment. The price may go down further, creating a better opportunity to buy more BTC.