Bitcoin’s price has been stuck in a narrow range, affected by the cash-and-carry arbitrage approach. The behavior of institutional traders is further cementing the expectation of this range-bound trend. Bitcoin has been fluctuating between $56,552 and $73,777 for an extended period, creating a highly volatile trading atmosphere. Traders are tasked with the challenge of predicting breakout directions within this unpredictable range.
Experts advise waiting for a clear breach of resistance levels before engaging in significant trades, as highlighted in the Coin Market Cap news updates. The complexity of making such trades is exacerbated by this situation. The recent price stagnation of Bitcoin is primarily attributed to the cash-and-carry arbitrage strategy, as noted by Glassnode. This trading technique involves taking a market-neutral position by buying BTC in the spot market (going long) and simultaneously selling its futures contract (going short) when trading at a premium.
According to The Week Onchain Newsletter, this trend is expected to continue. In their report published on June 18, Glassnode analysts observed that the cash-and-carry trade persists, with a noticeable increase in activity by institutional traders, reinforcing the expectation of range-bound trading for the foreseeable future.
On June 18, Bitcoin reached $64,602, the lower limit of its range. The downward movement of the 20-day EMA at $67,249 and an RSI below 40 indicate a bearish trend. If $64,602 is breached, Bitcoin may fall to $60,000, but a rebound above the 20-day EMA could propel it to $70,000. Despite significant inflows into crypto investment products, Bitcoin’s price remains range-bound. Glassnode pointed out that the increased cash-and-carry trades, involving long positions in U.S. Spot ETFs and shorting futures on the CME Group exchange, are dampening the impact of these inflows.
Furthermore, Bitcoin’s price experienced a 6% decline in the past week due to the Federal Reserve’s restrictive stance, causing investor confidence to waver and resulting in $32 million in liquidations over the last 24 hours.
Following the halving on April 20, Bitcoin entered its fifth epoch, reducing miner rewards from 6.25 BTC to 3.125 BTC, significantly affecting miner revenue. Despite a 12% drop from the all-time high of $73,800, analysts remain cautiously optimistic. CrediBULL Crypto and other analysts suggest a potential bottom for Bitcoin around the $64,000 level, with potential further support at $60,000, $52,000, and $46,000. Currently, Bitcoin (BTC) is trading around $64,946.79, showing a 0.24% decrease in the last day and a 4.87% decrease in the last week. See the BTC price chart below for more information.