The Bitcoin (BTC) price has been experiencing a consolidation phase over the last seven days, oscillating within a roughly $8,200 range. The elusive $100,000 mark remains out of reach as the cryptocurrency struggles to break free from its current stagnation.
Demand for Bitcoin Investment Products Stalls
One primary reason behind the stagnant trend is the decrease in demand for Bitcoin investment products. The Thanksgiving holiday in the United States has contributed to this slowdown, resulting in a decline in flows into BTC investment products.
- Outflows from Bitcoin Investment Products: Outflows from Bitcoin investment products totaled $457 million over the week ending Nov. 29.
- Spot Bitcoin ETF Balances: Spot Bitcoin ETF balances have been relatively stable since Nov. 25, despite both record inflows and outflows in November.
Hourly Net Realized Profit Peaks and Plateaus
The hourly Net Realized profit peaked at $1.08 billion on Nov. 21 before dropping and plateauing around $33 million over the last seven days. The chart below displays the Net Realized Profit/Loss metric used to assess the hourly change in on-chain capital flows for Bitcoin, measured in US dollars.
Net Realized Profit / Loss (USD)
At present, it can be seen that both profit and loss forces are largely equal, resulting in market equilibrium. The chart illustrates the fluctuating nature of Net Realized Profit/Loss over time, providing insight into the overall health of the Bitcoin market.
Bitcoin Stuck Between Two Trendlines
On Dec. 2, Bitcoin price fell below the support provided by the 50-period simple moving average (SMA) at $95,821, as shown in the four-hour candlestick chart below. However, BTC/USD found support at the 100 SMA, currently sitting at $95,051.
BTC/USD Four-Hour Chart
Bitcoin’s price has now risen above the 50 SMA, but it needs to surpass the resistance at $98,200 to break out of the current consolidation pattern. The chart below highlights the importance of breaking this barrier in order for Bitcoin to regain momentum.
BTC Price and Resistance
The BTC price is also pinned under a relatively stiff barrier, sitting within the $96,422 and $97,111 congestion area, as per data from IntoTheBlock. This zone is significant due to its high concentration of addresses that acquired approximately 597,620 BTC within this range.
Bitcoin IOMAP Chart
The in/out of the money around price (IOMAP) chart below shows that this is where more than 733,760 addresses acquired approximately 597,620 BTC within this range. This highlights the importance of addressing the current congestion area to break out of the consolidation pattern.
Support from Buyer Congestion Zone
On the downside, the 100 SMA at $95,051 is within the $92,876 and $95,736 buyer congestion zone, which is now providing support for the bulls. Roughly 688,690 addresses previously bought approximately 348,720 BTC in this zone.
Conclusion
The reasons behind Bitcoin’s stagnant trend are multifaceted, with demand for investment products being a primary contributor to the current consolidation phase. The market is experiencing equilibrium, with both profit and loss forces largely equalized. To break out of the current stagnation, Bitcoin needs to surpass the resistance at $98,200.
Investment Disclaimer
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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