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Bitcoin price has been trading in the same range for a few days, maintaining a narrow consolidation.
On-chain data suggests the likelihood of prices remaining stuck in a confined range for an extended period of time, as bulls appear to have been passive since the start of the year.
The bearish cloud completely envelops the cryptocurrency space as the star cryptocurrency, Bitcoin is hovering in the same micro range. Moreover, the current price action shows the possibility of a drop below the $27,000 base level. It is important to note that the volumes have declined significantly since the beginning of the year, despite this, the price has maintained a clear upward momentum.
Therefore, it can be assumed that the bears will remain largely passive compared to the impact until 2022. This could severely affect the price, which is speculated to be around $27,000 or slightly above or below these levels. Here are the main reasons why BTC price may remain in a sideways trend until the end of Q2 2023.
Trading volume has dropped significantly
Trading volumes hit an all-time high and had been hovering around $10 billion since the beginning of the year. Currently, the recent decline has dragged down trading volumes, which reached nearly $5 billion in the last trading day. The plummeting trading volumes suggest that market participants’ interest in the star cryptocurrency has been overwhelmed as other tokens may have stolen the limelight.
Modest increase in exchange supply
The supply on exchanges has also held up nicely while BTC price has maintained a sharp rise. As the price reached yearly highs, the supply also peaked. Following this, both price and supply turned bearish, indicating that traders intended to hold onto their wallets. However, levels appear to have rebounded, indicating a shift in mentality among traders, who may be bringing back coins to sell or exchange.
Daily active addresses dropped significantly
Daily active addresses are nothing more than the number of addresses that have interacted with the platform. All addresses are taken into account regardless of whether they have placed a buy, sell, or swap order. A rise in the level indicates heavy participation from market participants, while a drop could indicate a shift in focus to other coins.
Recently, new tokens like PEPE and BRC-20 tokens have created a huge stir in the crypto space, which has also reduced the demand for major tokens to a certain extent. Therefore, the popular meme-coin trend is expected to continue, which may force Bitcoin (BTC) price to consolidate in a narrow range.