Why is Bitcoin price stuck?

Bitcoin (BTC) is stuck inside a trading range this week, fluctuating between $68,350 and $71,500 in a period of indecision among traders aboout the next potential market bias.

BTC/USD hourly price chart. Source: TradingView

Bull pennant range

Observing Bitcoin’s daily chart, it appears that its current period of price stability is unfolding within the confines of a Bull Pennant formation.

A bull pennant is a bullish continuation pattern that occurs when the price fluctuates inside a symmetrical triangle range after a strong uptrend. This technical setup progresses in three distinctive phases: pole formation, consolidation, and breakout.

BTC/USD daily price chart. Source: TradingView

As of March 29, BTC has entered the consolidation phase of its prevailing bull pennant pattern. It shows that traders have been assessing the sustainability of Bitcoin’s prevailing bullish trend. This is marked by reduced market activity, as evidenced by declining trading volumes.

Bitcoin whales return to accumulation

Bitcoin’s current lateral movement aligns with the transfer of BTC holdings from smaller investors, often referred to as “sharks”, to larger investors or “whales.”

Notably, the number of addresses with 100-1,000 BTC holdings — also known as sharks — has been declining since March 12.

Bitcoin shark addresses count. Source: Glassnode

The decrease in shark holdings aligns with a surge in whale accounts during the same timeframe, further paralleling upticks in capital investments into U.S.-based spot Bitcoin exchange-traded funds (ETFs). Whales represent entities that hold more than 1,000 BTC.

Bitcoin whale addresses count. Source: Glassnode

Redistributing BTC from sharks to whales may enhance market stability and possibly a gradual price uptick over time. This stems mainly from whales’ characteristic behavior as long-term investors, who are less likely to liquidate their holdings, thereby diminishing market volatility.

Related: Bitcoin whales copy classic bull market moves as BTC price eyes $72K

Additionally, if whales are accumulating in anticipation of future price increases, their activity could precede bullish market trends.

When will BTC price break out?

Bitcoin appears poised to continue trading within the bull pennant formation in the near term. However, per the rule of technical analysis concerning bull pennants, the price may breach the range’s upper trendline to target $97,600 by May.

BTCUSD daily price chart. Source: TradingView

Conversely, on the weekly timeframe chart, BTC’s relative strength index (RSI) indicates the market as overbought, raising potential of further consolidation or a downright correction in the coming weeks. 

BTC/USD weekly price chart. Source: TradingView

With just a few weeks before the halving, BTC’s price risks correcting or consolidating inside the 1.00-0.786 Fibonacci retracement level range, defined by the circa $69,300-67850 area, in the coming weeks.

A clear breakout above the 1.00 Fib line, however, can send the price toward the 1.618 Fib line or above $100,000.

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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