Bitcoin is currently trading above $26,800 after breaking above this resistance level in the afternoon hours of September 28th. However, according to cryptocurrency analyst Altcoin Sherpa, Bitcoin is in a consolidation phase, which can often last longer than expected.
“These consolidations can take a lot longer than most people think. Chopping around for several weeks in this current environment is normal and it’s quite hard to trade Bitcoin now,” Sherpa stated.
During consolidation phases, Bitcoin tends to trade sideways within a relatively narrow price range. This makes it difficult to predict clear market trends and direction. As Sherpa notes, attempting to trade Bitcoin in this choppy environment can be challenging for even experienced traders.
A prolonged consolidation period allows previous Bitcoin bull runs to cool off and consolidate at new support levels. However, this also generates uncertainty in the market, as traders await a breakout in either direction.
According to Sherpa, the best strategy during Bitcoin’s consolidation is to “preserve capital and chill out” rather than trying to time entries and exits. This avoids getting “chopped up” by the whipsaws and fluctuations characteristic of directionless trading.
Patience and caution are prudent during these periods of low volatility. The next major market movement will likely occur once Bitcoin breaks out of its current trading range. Until then, uncertainty remains regarding Bitcoin’s short-term price trajectory.
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