Crypto Market Consolidates, With Bitcoin on the Verge of Potential Breakout
The crypto market remains in a period of prolonged consolidation, with the overall market cap approaching $3 trillion. Analysts are speculating that a major move higher could be imminent, particularly as Bitcoin (BTC) hovers near $95,000.
Despite this, major cryptocurrencies like Ether (ETH), BNB Chain’s BNB, and Solana’s SOL have shown little movement, while XRP and Cardano’s ADA saw declines of 2%. Dogecoin (DOGE) also dropped by 3%.
Spot Bitcoin exchange-traded funds (ETFs) saw a loss of $56 million on Wednesday, breaking an eight-day streak of positive inflows that had nearly $3 billion flowing into these U.S.-listed products.
Over the past week, markets have remained relatively range-bound, setting the stage for what some analysts believe could be a significant move upward.
“Such prolonged consolidations typically build up strength for a breakout. The key catalyst could be Friday’s labor market data,” said Alex Kuptsikevich, chief market analyst at FxPro, in an email to CoinDesk.
“Over the last five days, the market has fluctuated within a narrow range, with slight declines, but it has yet to break above its 200-day moving average, which now stands at $3.01 trillion. A global positive sentiment is needed for a breakout, and if it happens, it could lead to the $3.5 trillion range,” Kuptsikevich added, suggesting that altcoins may see strong movements as well.
Pat Zhang, head of research at WOO X, echoed the sentiment. “Bitcoin has been consolidating between $93,000 and $95,000 since April 25, and it’s building momentum for a potential breakout,” he noted in a message on Telegram.
“The average funding rate for Bitcoin has been negative over the past week, which is a rare occurrence, signaling that whale activity is intensifying on and off exchanges,” Zhang explained.
Over the past two years, Bitcoin financing rates have turned negative only four times—Sept. 19-22, 2023, Oct. 20-27, 2023, Aug. 16-24, 2024, and Sept. 10-17, 2024.
“Following these periods of negative funding rates, Bitcoin has experienced significant upward trends, suggesting that whale accumulation may be preparing Bitcoin for an upward move,” Zhang said.
While the crypto market shows potential, macroeconomic sentiment continues to be weighed down by global traders’ focus on U.S. tariff policies.
Bloomberg reported that President Donald Trump acknowledged on Wednesday that his tariff program has faced perception challenges and could pose a significant political risk. However, he expressed confidence in moving forward, claiming that “potential deals” with South Korea, India, and Japan were already in place, and that a deal with China was progressing in his favor.
