- Bitcoin has been consolidating between $9,000 and $10,000 for the past several days and weeks, struggling to garner any clear trend
- The crypto has expressed some overt weakness in recent times due to its propensity to trade near the lower boundary of this range
- Buyers have been ardently defending against a drop below $9,000
- One trend seen while looking towards the publicly traded Grayscale Bitcoin Trust seems to indicate that the cryptocurrency could be forming a long-term bottom that will be followed by an uptrend
Analysts are conflicted as to whether or not Bitcoin’s extended bout of sideways trading means that it is forming a long-term top, as the cryptocurrency has been hovering within the $9,000 region for well over a month.
It is important to note that the benchmark crypto tends to form tops in sharp movements, rather than through long, drawn-out bouts of range-bound trading.
One analyst does believe that this suggests that Bitcoin is not currently forming a top.
A trend seen while looking towards the Grayscale Bitcoin Trust’s premium seems to corroborate this notion, with its plummeting premium historically being a sign of the market bottoming.
Analyst: History Shows Bitcoin is Not Currently Forming a Top Pattern
At the time of writing, Bitcoin is trading up just over 1% at its current price of $9,240. This is around where it has been trading over the past day.
In the time since the massive volatility was seen last week – incurred when BTC pushed to $9,800 before facing a swift rejection – it has been hovering in the lower-$9,000 region.
Despite its prolonged bout of sideways trading and frequent rejections around $10,000 both indicating that BTC has formed a top, one analyst doesn’t believe that this is the case.
He notes that in the past, all of the benchmark cryptocurrency’s macro tops “usually happen fast” and are not formed over multi-week periods.
“Something’s off, this is taking too long. If this is the top, then it might be the most drawn out top in BTC history. BTC tops usually happen fast, blow-off top style or a roll-over that accelerates quickly,” he explained.
Image courtesy of Byzantine General. Chart via TradingView.
What the Grayscale BTC Trust’s Premium Might Say About the Crypto
There’s another factor that signals Bitcoin is not forming a top.
The same analyst also pointed to the GBTC premium, explaining that low premiums tend to correlate with market bottoms, and vice versa.
Because the premium has been diving as of late, it is a possibility that the cryptocurrency could be positioned to see further upside in the coming days and weeks.
“Premium is always higher when market goes parabolic, premium is low when market bottoms out,” he said.
Image courtesy of Byzantine General. Chart via TradingView. Featured image from Shutterstock. Charts from TradingView.