For more than a month, Bitcoin prices have been consolidated around the $30,000 level, with few factors providing an upward boost.
According to data, Bitcoin (BTC) is currently trading at $30,318, essentially unchanged from where it was in early May.
The token has dropped more than 50% since a record high in 2021 and is down 35% so far this year. The majority of its losses have been caused by macroeconomic factors such as rising inflation, interest rate hikes, and the Russia-Ukraine conflict.
Despite its significant losses this year, analysts believe Bitcoin has yet to reach its bottom. Before a recovery, forecasts range from $28,000 to as low as $20,000.
Willy Woo, a popular crypto analyst, stated on Twitter that while BTC has seen some buying at lower prices, the token has yet to confirm a bottom.
Woo noted that, in contrast to previous BTC dumps, which had 60 percent of total holders at a loss, only 47 percent are holding at a loss this time. This most likely means that the token will suffer additional losses.
The token continues to see a healthy amount of institutional buying. However, this is not enough to keep prices stable for the time being. Given the worrying macro environment, the majority of traders are still hesitant to buy in at lower prices.
According to Willy Woo:
“BTC is attempting a bottom structure which has not yet been confirmed. Locally we are seeing strong spot demand by holders, likely institutional. None of this matters if macro markets crap themselves.”
Bitcoin, like the stock market, has been trading in a narrow range this week in anticipation of key US inflation figures on Friday. An in-line or even stronger reading for May is likely to cause market havoc, as it will signal further Federal Reserve policy tightening.
While inflation eased slightly in April, it remained at 40-year highs. If this trend continues, BTC and the crypto market will suffer even more, as high inflation may trigger an economic recession.