Bitcoin Risks Prolonged Consolidation as Sentiment Weakens: CryptoQuant

It might take a while longer for Bitcoin and the broader crypto markets to establish a clear direction.

This is according to a recent CryptoQuant report released on Sunday, February 23. In it, CryptoQuant analyst “Avacado onchain” wrote that the leading digital asset, which has been stuck in a price range between $90,000 and $106,000 over the past few weeks, risked a months-long consolidation similar to the one it began in March 2024.

For context, Bitcoin went through a roughly seven-month consolidation phase from March 2024 through October 2024 before resuming its uptrend on excitement about the U.S. election and President Donald Trump’s victory.

Avacado onchain argued that Bitcoin could be kicking off a similar market phase, citing declining network activity as a signal of weak market sentiment.

For example, Bitcoin active addresses have dropped from recent peaks of over 1.1 million to near the 900,000-mark. At the same time, the transaction count on the network has plummeted over 46% from over 650,000 to nearly 350,000. 

Another factor highlighted by the analyst was a drop in positive netflows into exchange-traded funds.

Avacado onchain attributed the weakening market sentiment to a lack of concrete results from Trump’s pro-crypto agenda and geopolitical uncertainty in the wake of trade war fears.

“Since previous bullish narratives have already been priced in, further upside momentum will require either the resolution of uncertainties or new bullish catalysts,” they surmised.

But while Avacado_onchain is warning of the possibility of long sideways movement, at least one prominent trader has suggested that a Bitcoin breakout is imminent.

On Friday, February 21, veteran trader Peter Brandt suggested that February 24 through February 26 could offer insights on Bitcoin’s next move, citing internal symmetry in the price range.

In the meantime, Bitcoin is exchanging hands around the $96,000 price point.