Bitcoin (BTC) has been stuck below $29K for nearly three weeks, reaching historic levels for low volatility, but despite stunted price activity, bulls are bracing for a field day.<\/p>\n
On August 15, BTC lost 0.33% of its value to settle at $29,300, with on-chain data indicating several reasons for the trend.<\/p>\n
\u201cThe digital asset market continues trading within a historically low volatility regime, with several metrics indicating extreme apathy and exhaustion has been reached in the $29K to $30K range,\u201d<\/em> read a Glassnode report.<\/p>\n The narrow trading range comes on the heels of dwindling derivative trading volumes and annualized realized volatility, but lengthy sideways trading is not new for the asset class.<\/p>\n In early 2023, Bitcoin faced a similar patch after prices hovered at the $16,800 mark for nearly three weeks, and in 2016, the price of BTC appeared to be pegged at $604 for several weeks.<\/p>\n Pundits have blamed the recent trend on the push-pull effects of two key events. The first is the growing optimism around a potential approval by the U.S. Securities and Exchange Commission (SEC) for a spot BTC exchange-traded fund (ETF).<\/p>\n Fears that the banking regulator could jack up interest rates have stifled a rally for Bitcoin, with pundits citing the U.S. dollar index (DXY) recent gains in July.<\/p>\n Amid BTC\u2019s sideways trading, the trend is the short-term asset holder’s distribution concentrated between $25,000 and $31,000. Onchain analytics firm Glassnode reports that most short-term holders are in the red and could create selling pressure.<\/p>\n Despite the threat of selling pressure, the amount of BTC held by long-term holders has surged to a new peak of 14.6 million BTC.\u00a0<\/p>\n Pundits argue that worsening macroeconomic challenges may force the hand of long-term holders to dispose of their assets, noting that as a relatively new asset class, it remains unclear how holders will fare in the face of economic adversity.<\/p>\n While a cross-section of investors interpret Bitcoin\u2019s sideways trading as a precursor for dwindling prices, others have their sights on a rally. The optimists point to technical indicators as proof for a bull run, noting that shrinking Bollinger Bands have historically been a measure for a breakout for Bitcoin.<\/p>\n Pessimists have their eyes peeled on a forming wedge pattern and fundamentals like the SEC\u2019s hesitance to approve a spot-based ETF. The listing of the first spot ETF in Europe failed to trigger a BTC rally and the recent extensions by the SEC appear to back their stance.<\/p>\nLight at the end of the tunnel<\/strong><\/h2>\n