ZURICH, SWITZERLAND – Bitcoin’s recent period of price consolidation may be the calm before a significant storm, according to new data from the cryptocurrency analytics company Swissblock. Analysts predict that the current stagnant phase, which has seen Bitcoin hover around the $113,732 mark, is nearing its end and could soon give way to a fresh upward rally.
The forecast hinges on a critical shift in market momentum, which, despite being negative at present, shows signs of swinging positive. Such a shift could act as a powerful catalyst, potentially triggering a substantial price surge for Bitcoin, Ethereum, and other leading cryptocurrencies.
Momentum, Profit-Taking, and Investor Behavior
In a recent analysis shared on the social media platform X, Swissblock detailed that Bitcoin’s momentum has stalled primarily due to increased profit-taking from investors. However, the firm notes a crucial difference in the current market behavior. The selling pressure is described as “milder” compared to the intense profit-taking waves seen earlier in the year, suggesting that investors are securing profits moderately rather than engaging in panic selling.
“The propensity to generate profit is diminishing, and the selling pressure is largely being absorbed,” Swissblock stated. “Bitcoin is gearing up for a breakout; however, aligning momentum is crucial.”
This absorption of selling pressure indicates that the market is building a strong base. Analysts believe that once this phase concludes, the path will be clear for a sustained move higher.
The Psychology of a Market in Profit
Swissblock’s report delves into the complex psychology of a market where the vast majority of holders are in the green. With an estimated 96% of the Bitcoin supply currently in a state of profit, a “dual situation” has emerged. While this encourages strong, long-term investors to hold their positions, the allure of unrealized gains may tempt smaller or newer investors to sell at the first sign of an uptrend, temporarily capping price growth.
“Until demand resurfaces, further sales occur at every uptrend,” the report articulates. “The trend persists, but momentum regeneration is necessary.”
Despite this, the analysis points out that the fundamental technical indicators for Bitcoin remain overwhelmingly positive, suggesting the consolidation is a healthy and necessary phase before the next leg up.
Core Fundamentals Remain Strong, Altcoins on Watch
Beneath the surface of the sideways price action, Bitcoin’s core metrics are stable and robust. Swissblock’s Bitcoin Fundamental Index (BFI) currently sits at 60, indicating a neutral but healthy stance. While network growth has seen a slight loss in momentum, liquidity is reportedly recovering.
“This environment supports consolidation, allowing Bitcoin to move sideways for a while before potentially achieving a noteworthy breakout,” the report claims.
Interestingly, Swissblock highlights a potentially explosive scenario for other digital assets. “If the momentum shifts while Bitcoin moves sideways, Ethereum ($3,505) and other altcoins might surge rapidly,” the firm stated, suggesting that capital could flow into altcoins as Bitcoin builds its base.
At the time of reporting, Bitcoin was trading at approximately $114,747, down about 3% over the last 24 hours. While short-term volatility is expected, the underlying data suggests that a shift to positive momentum could be the key that unlocks the next major wave of appreciation for the entire crypto market.
