The recent Bitcoin rally has defied expectations, driven not by speculative trading but by long-term holders seeking diversification, according to Markus Thielen, head of research at 10x Research. However, short-term indicators now suggest a possible market top, raising concerns that the Bitcoin rally may be entering a consolidation phase.

Despite many analysts predicting new all-time highs by June, Thielen remains skeptical, pointing to on-chain data that signals a “bear market environment rather than a bullish one.”

Short-Term Indicators Flash Warning Signs

Thielen highlights the Bitcoin stochastic oscillator, a momentum indicator, which shows patterns resembling a market top rather than the early stages of a new Bitcoin rally.

“Short-term signals are not aligning with longer-term indicators, highlighting the disconnect in the market outlook,” Thielen explained.

He added that Bitcoin is no longer a “parabolic ‘Long-Only’ retail-driven market” but instead requires a “more sophisticated, finance-oriented approach.”

The Bitcoin rally over the past year has been fueled by institutional interest and buy-and-hold strategies rather than retail speculation. Over the last 12 months, Bitcoin has surged 32.80%, currently trading at around $83,810.

Could Bitcoin Repeat Its 2024 Pattern?

Thielen suggests that Bitcoin may enter an extended consolidation phase, similar to its behavior in 2024.

“Despite our cautious optimism, we view Bitcoin as trading within a broad range of $73,000to$94,000, with a slight upward bias,” he said.

In March 2024, Bitcoin hit a then-all-time high of $73,679 before entering a months-long consolidation phase. The Bitcoin rally only resumed after Donald Trump’s U.S. election victory in November.

June: A Pivotal Month for Bitcoin?

While Thielen remains cautious, other analysts believe the Bitcoin rally could accelerate, with June being a potential turning point.

Swan Bitcoin CEO Cory Klippsten told Cointelegraph in early March that there’s a “more than 50% chance we will see all-time highs before the end of June.”

Bitcoin network economist Timothy Peterson and Real Vision chief crypto analyst Jamie Coutts share this outlook.

“It is entirely possible Bitcoin could reach a new all-time high before June,” Peterson said.

Coutts added, “The market may be underestimating how quickly Bitcoin could surge – potentially hitting new all-time highs before Q2 is out.”

A More Nuanced Bitcoin Rally Ahead

The current Bitcoin rally is unlike previous cycles, driven by institutional adoption rather than retail hype. While some analysts remain bullish on a June breakout, Thielen’s research suggests caution, with potential consolidation in the near term.

For investors, this means the Bitcoin rally may require a more strategic approach, balancing long-term optimism with short-term volatility. Whether Bitcoin breaks new highs or enters a prolonged range, one thing is clear: the market is evolving, and the days of simple “buy and hold” speculation may be over.

As the Bitcoin rally continues to unfold, traders will need to stay alert to shifting trends and market signals to navigate the months ahead. Stay up-to-date with the latest crypto and web3 news and analysis. Stay glued to The Bit Gazette.