Crypto Consolidation Looms as Bitcoin Struggles with $66K Mark Amid Profit-Taking and Record Open Interest

Bitcoin struggles to keep above US$66K (AU$100.1K) and is currently down 3.5% in the past 24 hours. The broader crypto market also saw a correction with most major assets making losses on the daily timeframe, apart from Ethereum which is still booking a 0.5% gain.

Related: Bitcoin Adoption Accelerates as Michigan State Pension Fund Snatches up $6.6 Million in BTC

Market participants are scratching their heads as to why the market is not rallying, after all the Bitcoin 2024 conference has just seen some very bullish speeches. BTC has struggled to break through the US$70K (AU$107.1K) barrier on most exchanges during the conference in Nashville, Tennessee, but shortly after the event finished, it started its descent into the mid-60K range.

Bitfinex Suggests Consolidation Possible

This comes after Bitcoin saw a rally of 30% from 5 July, which has likely led to some profit-taking. As reported earlier, short-term holders in profit may have taken some money off the table.

While this profit-taking and the additional sell pressure from the Mt. Gox sales could lead to further consolidation, overall analysts are positive.

Bitfinex for example reports a marked increase in Bitcoin futures market activity, with a notable rise in long positions countering spot market sales.

Since July 25th, Bitcoin futures open interest surged (OI), signalling strong market engagement and leverage use, particularly as traders bought dips ahead of the Nashville conference, the analysts wrote.

As per Coinglass data, global open interest for Bitcoin futures has reached US$37.14 billion (AU$56.65bn), nearing the all-time high of US$39 billion (AU$59.5bn) from March. 

BTC Could be Consolidating for Longer

Supporting the consolidation narrative is analyst RektCapital who wrote on X that “Bitcoin has made its way back to the Range High of its Re-Accumulation Range” and is now close to surpassing the weekly high. With just one more weekly close above the range high, it is ready to enter the “Parabolic Phase of the cycle”, he added. 

Related: Analyst Foresees a Bitcoin All-Time High is Coming Soon, Defying Historical Cycles

The only problem, according to Rekt, is that history doesn’t support achieving another all-time high so soon after the halving. The analyst believes it may be another couple of months of consolidations before Bitcoin can “resynchronise with historical Halving cycles”.