Not so long ago, we witnessed a huge bull run in the DeFi space, which was hugely sparked by investor confidence in Bitcoin. Shortly after peaking at $64,800 on April 14, Bitcoin went into a correction later shedding about 10% in value in only three days.
Several days later, as expected, this drop caused widespread fear as traders and investors sold their holdings to avert further losses. What followed later was a consequential dump across all coins, with Bitcoin down by about 55% by 19th May. According to CoinMarketCap, this dump shrunk the entire crypto market from over $2.2 trillion to less than $1.5 trillion.
For the past one and a half months, Bitcoin continues to struggle for an edge between $41,500 and the $29,000 area since 19th May without any signs of a clear direction. We are officially in a range-bound market. The big question however remains; when shall we break out of this squeeze for another bull run?
While it seems to already have found a bottom at $29,000, nothing can be further from the truth. In the general crypto trading community, ranging markets are seen as neutral patterns and the possibility of price breaking out, either way, cannot be underestimated, albeit one’s strong opinion.
There are sentiments that price could drop lower to $20,000 before resuming the bull run, while others are confident that price has reached its bottom and have thus started taking positions inside the range.
Notably, some big institutional investors and high net worth individuals such as George Soros through his Fund management group have expressed their interest in joining the space by purchasing Bitcoin.
Elon Musk’s Tesla purchased $1.5 Billion worth of Bitcoin during the first quarter of 2021, Microstrategy, one of the biggest investors purchased $2.1B worth of BTC, and Square which also purchased about $220 million worth of BTC just to name a few.
El Salvador also became the first country to adopt Bitcoin as a legal tender in June, expressing its confidence in its potential to keep the country’s economy stable and bring financial inclusion and encourage investment. We expect to see more countries and institutions starting to recognize and adopt BTC in the future, which will see its value resume in an uptrend.
Staying calm and patient when prices move sideways is always a great strategy when planning to take a trade. Being Sometimes in no trade at all is better than being all in, exposed without any clear strategy.
For now, the best option would be to wait for the price to break out to either side of the range for us to get a clear direction. A break and close-by price above the $41,500 area could see a surge in buying volume, which could propel BTC into another bull run.