Bitcoin’s price was caught in a series of range-bound trading in recent days, with support at USD 18,000 and resistance at USD 19,000, leading to the formation of a new and intense trading range.
The trend of sideways trading has been very popular altcoin bulls as Ethereum and many other digital assets have made massive gains in recent days.
This momentum shows little sign of slowing down anytime soon, and some believe Bitcoin consolidation will return funding rates to neutral before the cryptocurrency embarks on the next leg of its journey.
While you go to Bitcoin’s macro price development, the cryptocurrency now has significantly better risk-adjusted returns than gold, bolstering its safe haven status.
If this trend continues, the story of it being an emerging safe haven could continue to gain traction and potentially attract a large number of new investors.
Combine this with the “FOMO” starting to catch up as soon as crypto breaks above $ 20,000, and there is a good chance it will soon see tremendous momentum in the coming days and weeks.
Bitcoin is entering the consolidation phase as new forms of trading scope
At the moment of writing, Bitcoin is trading marginally at the current price of $ 18,300. This is roughly where it has been trading for the past few days.
The selling pressure it found at $ 19,000 has proven too high for bulls to break, with every visit to this level resulting in a harsh rejection.
There is massive support around – and just below – USD 18,000 which has been bolstering the price action of late, quickly absorbing any dip to this region.
On-Chain Analyst: BTC has a better risk-adjusted return than gold
While looking at Bitcoin’s risk-adjusted returns over a macro time frame, it far outperforms counterparts such as gold and other assets.
This gives some validity to the safe harbor narrative that has largely supported the recent advance.
An on-chain analyst spoke about this in a tweet today, saying:
“Bitcoin is more stable than gold as an investment vehicle. When you’re in it for the long haul, you want a stable return over the long haul for the risk you’re taking. Daily price volatility fades into the background for long-term investors. “
Image Courtesy of Willy Woo.
As Bitcoin nearing new record highs, whether or not this story will be enough to see a sustained rise higher remains to be seen.
Featured image from Unsplash. Charts from TradingView.