The recent deluge of spot Bitcoin ETF applications led to a major rally for Bitcoin in mid-June. While the number one crypto asset managed to overcome the 30,000 level as a result, Bitcoin’s price has continued to fall within a tight range in recent days, only managing to close above 31,000 once. Let’s see if this narrow Bitcoin price range suggests a major move forward or more sideways movement in the near future.
Another narrow base for Bitcoin
After June’s big run, Bitcoin’s price has continued to trade sideways, falling in a tight range of less than five percent from the highest to the lowest close over a recent 15-day period. While not every day, there have been thirty-six such bases in Bitcoin’s modern history (2011 – present) using a relatively short seven-day retention. Basically, it’s just another narrow base for Bitcoin.
Bitcoin daily chart | BTCUSD at TradingView.com
What does this recent tight basis for Bitcoin’s price suggest? To find out, we look at all the signals since 2011 and add an additional condition that better describes the current market conditions regarding Bitcoin.
Potential big move in 90 days
In addition to requiring a range of less than five percent from the highest close to the lowest close over a 15-day period, our additional condition requires Bitcoin’s price to also close above 200MA. This additional condition filters out narrow bases during periods of downward price momentum and better describes Bitcoin’s current technical state amid an improving macro environment.
The holding time chart below illustrates Bitcoin’s historical tendency for only modest gains in the short term, with an unimpressive average hypothetical trade of +0.5% using a 7-day hold, a measly average trade value of +3 .4% when using a 15-day hold, and a more respectable average transaction of 8.2% with a 30-day hold.
Bitcoin Waiting Statistics | SOURCE: Table
Beyond the near-term horizon, however, Bitcoin’s history suggests much better prospects with a slightly longer holding time of 60 days, averaging +28.5% from 2011 to date. However, from a more medium-term perspective, Bitcoin’s average trading stats look significantly higher at +46.7% due to its 90-day retention.
While the past does not predict the future, based on our analysis, a similar result for Bitcoin in the future would put BTCUSD at 44,752 in early October, about three months away. While the prospect of a looming recession and continued regulatory uncertainty for the US crypto industry may dampen this outlook, history suggests the potential for a major move forward in the medium term.
DB the Quant is the author of the REKTelligence report newsletter on Substack. To follow @REKTelligence on Twitter for evidence-based crypto market research and analysis. Important Note: This content is strictly educational in nature and should not be considered investment advice. Featured images created with Tableau. Charts from TradingView.com.