Bitcoin Price Set for Breakout or Crash: August's Midterm Election Pattern
Bitcoin's price action is currently being pinched between two converging moving lines on its chart. According to an analyst, this kind of squeeze doesn't stay quiet for long and a decision will likely be made within the next couple of months.
The current price of $63,500 sits almost exactly on top of Bitcoin's 200-week moving average near $63,700, which it closed just below last week. Above that is a separate longer-term resistance band near $69,000, which has been sliding lower for months.
Several on-chain indicators, including the MVRV ratio, tend to bottom out below zero at the end of past cycles. This measure is currently close but hasn't yet reached that level, suggesting the possibility of one more move lower before those indicators fully reset.
In every prior midterm election year, Bitcoin has posted a red August with declines ranging from 5% to 18%. The irony is that July, the month right before, has almost always been strong in those same years, up 20% in July 2022 and nearly 40% in July 2018.
Analyst Michaël van de Poppe pointed out that Bitcoin has essentially traded sideways since February with little happening in between. He believes the longer an asset stays rangebound, the more forceful the eventual breakout tends to be, and the more patience it demands once that move begins.