Bitcoin (BTC) Price Enters 150 Days of Time-Based Capitulation, What’s Next?

Bitcoin (BTC), the largest cryptocurrency globally, has rebounded significantly from last week’s low of $57,000 and is currently consolidating around $64,000 at the time of writing. Following the fourth Bitcoin halving last month, the price of BTC has predominantly stayed within a narrow range.

Bitcoin Price Capitulation

According to crypto analyst Rekt Capital, Bitcoin has recently completed a price-based capitulation phase known as the Halving Retrace phase, as indicated by the dark blue circle. Moving forward, the focus shifts to the time-based capitulation that the ongoing Re-Accumulation phase (red) will bring.

Rekt Capital suggests that a consolidation period lasting over 150 days after the Halving is in line with historical price patterns. Such a prolonged consolidation phase is viewed as beneficial for the cycle as it moderates the rate of Bitcoin price acceleration.

This extended consolidation period is anticipated to realign the current cycle with historical patterns observed after previous Halving events. This resynchronization is considered a positive development for Bitcoin’s long-term growth and stability within the market.

#BTC

Bitcoin has satisfied the price-based capitulation offered by the Halving Retrace phase (dark blue circle)

Now it's all about the time-based capitulation that the current Re-Accumulation phase (red) will now offer going forward

A 150+ day post-Halving consolidation… pic.twitter.com/bBbCRKrtxY

— Rekt Capital (@rektcapital) May 5, 2024

In March 2024, Bitcoin surged to unprecedented heights, marking new All-Time Highs and indicating a significant acceleration in the current cycle. This milestone was achieved 260 days earlier than the typical trajectory observed in traditional Halving cycles.

However, Bitcoin’s momentum has since stalled, with the cryptocurrency trading within a range of approximately $60,000 to $70,000 for nearly two months. This extended consolidation period has moderated the cycle’s acceleration, bringing it down from 260 days to 210 days compared to historical patterns.

Fed’s Interest Rate Cuts Can Provide Impetus

Bitcoin’s price has been bolstered by growing expectations of a potential rate cut by the Federal Reserve, with markets now pricing in an increased likelihood of a 25 basis point reduction in September. This shift in sentiment has provided support to cryptocurrencies, which typically perform well in an environment characterized by low-interest rates and ample liquidity.

The prospect of a rate cut gains traction amidst signs of a cooling labor market, offering the Fed additional motivation to consider monetary easing. However, this development follows a string of robust payroll reports over the past five months, underscoring the complexity of the economic landscape. Moreover, inflation, a key metric for the Fed, remains above the central bank’s target of 2% annually, further complicating the decision-making process.

Later in the week, members of the Federal Open Market Committee (FOMC), including Thomas Barkin, John Williams, and Neel Kashkari, are scheduled to deliver remarks, providing further insights into the Fed’s stance on monetary policy.