Bitcoin has been maintaining an uptrend for two recent weeks. The cryptocurrency's upsurge in volumes, as well as fundamental factors that made the asset even more in demand, contributed to this. As a result, Bitcoin came closer to $48,000. If the asset pierces this level, it may finish the consolidation period. However, Bitcoin failed to break through $48,000, and there are several important reasons for that.
As contradictory as it may sound, the main reason for the unsuccessful breakthrough of $48,000 was the gradual growth of the cryptocurrency. Investors, who held the asset for more than a year, as well as large mining companies, began to lock in profits. This was a natural and expected response during the uptrend of the BTC/USD pair. However, it has played an important role and made sellers put more pressure on Bitcoin. This unique situation brings us to the next important factor of the failed breakthrough of $48,000.
Despite two weeks of steady growth, the cryptocurrency's buying activity has not increased. The volume of Bitcoin purchases is insufficient for a rapid and powerful rally, sweeping away resistance levels. Big capital is increasing in the BTC market, there's no doubt about it. According to Goldman Sachs, the bank's big clients invested more in Bitcoin in three months of 2022 than they did in 2021. Progress is evident, but the pair has not experienced other factors aside from the accumulation of volumes.
All the above leads us to a logical conclusion. Bitcoin continues to be trading in a consolidation and accumulation phase. Sales from long-term investors and miners have partly contributed to this. However, this process is also typical of the period before establishing a bull market. According to Glassnode, Coinshares, and CryptoQuant, the main indicators of BTC accumulation are gradually approaching showing or absolute highs. This indicates that the market is approaching and ready for a bullish rally. However, let's not forget the fundamental context of what is happening.
The Fed meeting in mid-March announced that gaining liquidity from now on would be a difficult undertaking. This directly affects the flow of liquidity into the first cryptocurrency. While the whales continue to migrate liquidity cascades, smaller investors are ready for the rally. However, the key rate hike has slowed the process of receiving and migrating liquidity, and therefore the consolidation and accumulation period may take more time.
Therefore, we should expect a stronger fixation of the cryptocurrency around $44,000-$45,600 soon. Bitcoin needs to consolidate at these milestones for investors to realize the strength of upward momentum. Despite this, there is every reason to believe that the cryptocurrency may nosedive to the range of $42,400-$44,000. This is hinted at by the local decline in daily trading volumes and technical indicators.
The MACD indicator forms a bearish crossover, indicating the end of the bullish momentum. The stochastic and the RSI continue to decline to the depth of the buy zone, indicating an increase in the number of sales. That said, bears hit resistance at $44,200 and now need to wait until the US session opens to recover above $45,000. With that in mind, I expect Bitcoin to spend the next two to three days in a stabilizing and cumulative consolidation phase and then continue the uptrend towards $48,000-$50,000.
