Traders appear to be sitting on their hands even as Bitcoin price drops closer to a critical support level at $32,000.
Within the past few hours, a fresh wave of selling pushed Bitcoin (BTC) price close to the $32,000 support level as the low trading volume and general disinterest from traders saw the price revisit the lower section of its current range.
The price of Ether (ETH) also fell under pressure alongside Bitcoin as the building momentum ahead of the network’s upcoming London Hard Fork failed to support a price above $2,000, resulting in a daily low of $1,918.
Bitcoin's compression range tightens
Some insights into the current market conditions were offered by Gas Fring, a pseudonymous Twitter account, who posted the following tweet highlighting previous instances of range-bound trading for BTC.
1/ Here's a chart showing occasions when $btcusd has remained rangebound.— Gas Fring (@gas_fring_) July 13, 2021
Bitmex funding regimes help determine the direction of breakout.
Barring Q4 2018, when funding flipped from a negative to positive regime, a month long regime usually helps determine the direction... pic.twitter.com/te93tA98JO
As shown in the chart below, Bitcoin price has a tendency to trade within a consistent range following significant price moves, with previous instances lasting up to 132 days as was the case in late 2018 to early 2019.
The current compression range has lasted 55 days with a tighter range between $30,000 and $36,500 being seen since June 19.
According to Gas Fring, in the previous instance of a “layered stricter compression” seen in Q4 of 2018 and in the summer of 2020, the period of tighter compression “lasted for roughly half the overall period.”
“This tells me that we might have another 2 weeks or so of such inner tighter compression which will take the periods to 34 and 68 days respectively.
Altcoins hit hard as Bitcoin continues to struggle
The altcoin market was hit hard by the afternoon sell-off, leaving few coins in the green as traders hastily made for the exits.
Nonfungible and gaming tokens like Axie Infinity (AXS) and Small Love Potion (SLP) continue to be the bright spot in an otherwise gloomy market, putting on gains of 22% and 35% respectively as new users embrace the daily income opportunity provided by the blockchain-based trading and battling game.
Other notable gainers include a 16% increase in the price of Phala Network (PHALA) and a 15% gain for MyNeighborAlice (ALICE).
The overall cryptocurrency market cap now stands at $1.314 trillion and Bitcoin’s dominance rate is 46.1%.
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