Bitcoin Breaks Above $40K Again, But When Will Consolidation Stop?

Bitcoin is still struggling to get out of the cage which is the $40K-$44K price range. Reaching this level was not the problem for the digital asset, but successfully breaking through it and maintaining consistent momentum above the $45,000 price was the biggest hurdle. Consolidation remains the name of the game. But how soon will this end?

Bitcoin Still Consolidating

Bitcoin has continued to consolidate in recent times. It had already broken through $40,000 three times in the first two months of 2022, and its recent breach above this point marks the fourth time. However, the previous three times have all had the same, it seems inevitable, result. The digital asset failed to maintain its position above $40K and eventually slipped back to $38,000.

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Bitcoin has held strong support at the $36,000-$38,000 level at all times, making it the point to beat for bears and the place to hold for bulls. So far, the bulls have proven to have the upper hand at the level. But for bitcoin, the consolidation has continued.

BTC trades above $41,000 | Source: BTCUSD on TradingView.com

With so much time having passed with the current consolidation, the market was expected to break out and eventually move towards $45,000, but this would turn out not to be the case. Rather, the tug of war between bears and bulls has kept the digital asset in this consolidation range.

How can BTC break out?

As with any consolidation range, bitcoin can break out in any direction depending on the momentum. Currently, bitcoin is trading above USD 42,000, but this is still weak ground, meaning bears could be dragging it with them at any time. For the digital asset to establish a meaningful recovery trend, it would have to definitively exit the $44,000 mark and move higher.

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It needs to break out of the top of the $45,000 resistance point to confirm an end to the current consolidation range. A breach above this price point would be a strong signal to the market that the bulls have re-captured the market. However, as always, there is no assurance that a breakout from the current consolidation range has to be upwards.

BTC in Consolidation Range | Source: mysterious investigation

BTC still maintains strong support around the $36,000 to $38,000 range as mentioned above, but a break below the lower end of this range would have some negative impacts on the cryptocurrency. Below $36K, the next point of support is near $34K. But if bitcoin were to move past this point, it would effectively end the current consolidation. This would bring the next critical support level at $28,000, a range that would signal serious difficulties for the digital asset.

Featured image of MARCA, chart from TradingView.com

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