Bitcoin (BTC) Slides Below $62K as Consolidation Drags on, but Traders Eye Possible Parabolic Rally

More than five months of sideways price action is testing investors' patience, but similar low-volatility episodes led to break-outs to new record prices

Bitcoin (BTC) fell below the $62,000 mark early Tuesday in U.S. markets hours as the crypto market paused in its recovery from early August lows.

The largest cryptocurrency dropped to as low as $61,500, now down more than 5% since its brief rally to $65,000 following Federal Reserve Chair Jerome Powell's dovish speech at Jackson Hole on Friday. It's down 3% over the past 24 hours.

The weak price action spread to the broader market, with the broad-based CoinDesk 20 Index falling 2.8% over the same time frame. Ethereum's ether (ETH) continued its losing streak against BTC, falling more than 5% to below $2,600 and dragging the ETH/BTC ratio to its lowest level in more than three years.

Major altcoins also saw losses, with the native cryptocurrencies of Avalanche (AVAX), Chainlink (LINK) and Uniswap (UNI) leading the way with declines of 4% to 7%.

Volatility Ahead

Bitcoin's sideways price action since its March all-time highs has tested investors' patience, but similar multi-month consolidation phases occurred in each of the previous bull markets, including last year's price action between March and October.

Well-followed crypto trader CryptoCon observed that the current low-volatility phase for BTC is likely the precursor to a break-out to the upside to new all-time highs, based on an analysis of the Bollinger Band Width on the weekly time frame.

Bollinger Bands, named after well-known traditional markets technical analyst John Bollinger, represent the volatility of an asset and are placed two standard deviations above and below the 20-week simple moving average of the price.

"This is the 3rd and final low volatility phase that comes mid-cycle, every cycle on Weekly Bollinger Band Width," wrote CryptoCon in an X post. "5 months of sideways price action is not new …" he added. "Missing out on 2025 is missing out on 2021, 2017 and 2013."

Notably, a similar compression of the Bollinger Band Width occurred last October, just ahead of bitcoin breaking out of a long consolidation and eventually surging nearly 200% to $73,000 by March.

Altcoin Pain

Altcoin holders may have to endure some more pain before lower-cap cryptocurrencies begin to break out higher and outperform bitcoin, market research firm ByteTree noted in a report Tuesday.

"Altcoin investors need to keep the faith. It’s tough out there, but the underperformance of alts vs. bitcoin has been difficult," Charlie Morris, founder of ByteTree, wrote in the report. "The good news is that positioning is light, and so when the good times return, there is the potential for yet another strong altcoin rally."

During past market cycles, altcoins rallied six months after bitcoin's quadrennial halving, Morris observed.

The last halving occurred on April 19, 2024, which would point to a potential rally later this year around October.

"In each case, alts got a little worse before they got better," Morris added. "If history repeats itself, alts should kick off in the new year, but only once Bitcoin has surged. The good news is that we are on track for a run in Q4."

MARKET INSIGHT

Bitcoin, ether and dogecoin prices today, Aug. 30: BTC stalls at $61.5K; DOGE down 3%

Prices of major cryptocurrencies like bitcoin, ether, dogecoin fell early Tuesday morning. Here's the latest.

Bitcoin Price Analysis: Bulls Defend Crucial Support at $61,200 as BTC Price Pauses Rally

Bitcoin (BTC) price action stalled early Monday morning in Asia after BTC/USD bulls failed to push through resistance at $62,300. BTC price dropped to lows of $61,200 before bulls recovered the majority of the lost ground.

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