BTC consolidates around $68k as on-chain data show mixed signals

The cryptocurrency market has underperformed since the start of the week, with Bitcoin consolidating around $68,200 at press time. 

The leading cryptocurrency by market capitalization has been trading within a defined range over the past nine days, with no clear directional bias. 

This comes amid weakened institutional demand, with spot Exchange Traded Funds (ETFs) recording a fourth consecutive week of outflows.

Furthermore, on-chain data signals mixed signals, suggesting that Bitcoin could remain in a consolidation phase in the near term. 

Institutional demand for Bitcoin products declines

Bitcoin is down by less than 1% in the last 24 hours and is now trading around $68,200 per coin.

The bearish performance comes as institutional demand for Bitcoin continues to decline. 

According to SoSoValue, spot Bitcoin ETFs recorded total outflows of $359.91 million last week, marking the fourth consecutive week of withdrawals.

If the trend continues, Bitcoin’s price could record further losses over the next few days and weeks. 

In addition to that, Santiment data shows mixed on-chain signals among traders, with Bitcoin consolidating over the past few days following a massive correction. 

The on-chain data shows that whales holding 10 to 10,000 BTC have added roughly 18,000 BTC over the last four days.

During that period, retail wallets holding less than 0.1 BTC have also been aggressively buying. 

Usually, a market bottom occurs when whales buy while retail traders sell out of fear.

However, the current dynamics suggest that the market might not have reached its bottom. 

According to Santiment, BTC’s 365-day Market Value to Realized Value (MVRV) ratio, which indicates if BTC is undervalued or overvalued, now reads -29.42%, and is approaching the December 2022 low.

This data shows that the average long-term holder is down significantly on their investment.

Bitcoin could remain within the consolidating range

The BTC/USD 4-hour chart remains bearish and efficient thanks to Bitcoin’s consolidating performance over the past few days.

The leading cryptocurrency has been trading between $65,729 and $71,746 since February 7. 

At press time, BTC is trading around $68,200.

If the market embarks on a recovery and Bitcoin breaks above the upper consolidation range at $71,746, the bulls would push the price higher toward the daily resistance at $73,072.

The Relative Strength Index (RSI) on the 4-hour chart reads 50, rebounding from oversold levels, signaling a growing bullish momentum. 

The Moving Average Convergence Divergence (MACD) is approaching a bullish crossover, further supporting the recovery thesis.

However, if the recovery fails and Bitcoin’s daily candle closes below the lower consolidation level at $65,729, the cryptocurrency could extend the decline toward the key support level at $60,000.

The consolidating phase means that it is harder to determine the immediate market direction.