Bitcoin’s sideways trend is driven by cash-and-carry trading and reinforced by stable whale holdings and a prevailing technical pattern.
Bitcoin BTC $66,615 has been experiencing consolidation within a roughly $5,500 range over the past three weeks and was trading for around $67,500 as of June 13.
Notably, since May 21, the cryptocurrency has been fluctuating between $72,000, acting as resistance, and $66,350, serving as support. It has repeatedly tried to break through to a new all-time high of $73,800 but failed so far.
Bitcoin’s sideways price trend is driven by the rise of Cash-and-Carry trades, with long positions in US Spot ETFs and shorting CME futures. Additionally, stable holdings by Bitcoin whales and a prevailing technical pattern are reinforcing this consolidation.
Cash-and-carry arbitrage strategy
Bitcoin’s price has remained stagnant in recent weeks primarily due to cash-and-carry arbitrage strategy. This strategy involves taking a market-neutral position by purchasing BTC in the spot market (going long) and simultaneously selling its futures contract (going short) when trading at a premium.
For instance, the cumulative inflows into the U.S.-based spot Bitcoin exchange-traded funds (ETFs) increased to $15.51 billion on June 13 from around $870 million on Jan. 12, when they debuted. In other words, these ETFs are instruments for obtaining long-spot exposure in the Bitcoin market.
On the other hand, hedge Funds are net short in both CME Bitcoin and Micro CME Bitcoin markets by $6.33 billion and $97 million, respectively, coinciding with a dramatic increase in both open interest and overall market dominance.
The rise and scale of cash-and-carry trades—long positions in U.S. Spot ETFs combined with shorting futures on the CME Group exchange—have significantly diminished the impact of buy-side inflows into ETFs. This has stabilized market prices in recent weeks.
Bitcoin whales are offsetting each other
The period of Bitcoin consolidation aligns with the stability in the holdings of Bitcoin’s largest whale cohorts, those possessing at least 100,000 BTC (black line). Concurrently, the smaller whale cohorts holding 10,000-100,000 BTC (yellow line) and 1,000-10,000 BTC (teal line) are balancing each other’s movements.
These whale supply trends are resulting in a net neutral effect on the overall market supply and demand, thus contributing to the overall price stability in recent weeks.
Bitcoin price chart: cup-and-handle pattern
From a technical standpoint, Bitcoin’s sideways trend in recent weeks is part of its prevailing cup-and-handle
A cup-and-handle pattern is characterized by a U-shaped price drop and recovery followed by a consolidation period. It is a bullish continuation pattern that, as a rule, resolves after the price breaks above its common resistance level, called the neckline, and rises by as much as the maximum distance between the cup’s trough and the neckline.
As of June 13, BTC’s price was in the consolidation stage of its cup-and-handle pattern, supported by its daily relative strength index (RSI) reading at 48.43, inside the 30-70 neutral zone. This indicates a growing impasse between bears and bulls about the market’s next direction.
Nonetheless, Bitcoin’s bias remains skewed to the upside as it awaits a breakout above its cup-and-handle neckline resistance of around $71,500. The primary upside target for the BTC/USD pair will be around $88,000 in July if the breakout occurs with a rise in trading volumes.
A pullback from the neckline, on the other hand, risks invalidating the cup-and-handle breakout setup, setting BTC on a correction cycle toward its current support at around $67,000, which is the 50-day exponential moving average (EMA; the red wave) by June.
A decisive breakdown below the 50-day EMA will risk crashing the price toward the 200-day EMA (the blue wave) at around $57,180, down about 15% from the current price levels.
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