Crypto investors and traders bored and frustrated with the sideways price action in Bitcoin should prepare themselves for the worst-case scenario. The worst-case and max pain scenario, in this case, isn’t a breakout or breakdown, it’s more sideways.
According to past cycle data, this tight trading range could potentially last another three months before sparks fly. And before it happens, the trading range could get even smaller.
Cryptocurrency Market Boredom Leads to Confusion, Uncertainty
Bitcoin price has reached the tightest range in the asset’s over decade long history. Volatility is at record lows.
At this point, and after nearly three full months of sideways price action, crypto market participants would gladly take either direction.
A breakout may be starting following an early morning surge supported by a stock market pump and rally in gold. Any break of the current tight range would likely lead to a collective sigh of relief across the crypto market.
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Boredom in Bitcoin has led crypto investors to altcoins, but a reversal in BTC dominance has the market confused yet again.
All the fear, uncertainty, and doubt could prevent today’s potential breakout from confirming with volume, causing Bitcoin to fail at leaving the trading range behind.
Past data shows that this type of non-existent trend could continue for another three months, despite spending almost all of Q2 trading inside the same range.
Bitcoin Sideways May Extend Another Three Months, According to Past Cycle Data
According to a new report from Arcane Research, Bitcoin’s trading range is now the tightest in history.
And although the asset has reached such a tight range, past data implies that the sideways price action could remain for another quarter into 2020.
The sideways price action is now 84 days in – or less than a week from a full 90 days. During the previous bear to bull market cycle, the leading cryptocurrency by market cap traded within a sideways range for almost a full six months.
After first trading within a 27% range, the range tightened further to just 11%. Bitcoin price was first trading within a 25% range this time around, but has since fallen to the tightest range ever.
Brave New Coin Bitcoin Liquid Index Daily | Source: TradingView
If the first-ever cryptocurrency follows a similar path as the last cycle, BTCUSD may trade even tighter in a sideways range for another three months.
The range first tightened further at 90 days in, just about where Bitcoin is now in this cycle. Then it spent another 90 days within just about a ten percent range.
Related Reading | How Lengthening Bitcoin Cycles Conflict With Halving Driven Supply Theories
Taking the price action of the last cycle and superimposing it over the current price action, potentially provides a look at what to expect in the months ahead.
The explosive move up eventually arrived, after a full 180 days and nearly six months of sideways. A similar timeframe would push off a major breakout in BTCUSD until Q4 2020, around the end of October.
Brave New Coin Bitcoin Liquid Index Daily | Source: TradingView
The potential fractal would send Bitcoin to $17,000, where the first higher low formed and started the bear market. This level could be the final resistance before the crypto asset retests its former all-time high.
But before this happens, the max pain scenario of another three months of sideways could keep the crypto asset bay a while longer.
