Bitcoin consolidation continues amid market uncertainty

Bitcoin (CRYPTO:BTC) is currently in a consolidation phase following its recent pullback from the January high of $109,000, with analysts predicting that this phase may persist due to liquidity needs and broader economic uncertainty.

"We should assume that we are in the pullback phase after the ATH and will likely continue to consolidate for some time due to liquidity needs," CryptoQuant contributor XBTManager noted.

This phase is expected to continue until long-term holders resume buying, making long positions more viable.

Historically, significant price adjustments have been preceded by short-term holders increasing their supply while long-term holders reduce theirs.

For instance, before Bitcoin reached $109,000 in January, short-term holders increased their supply, leading to a substantial decline in long-term holder supply.

Currently, long-term holder supply stands at 14.4 million BTC, down by 800,000 since December.

This trend indicates that the market is closely watching the behavior of long-term holders for potential price rebounds.

Bitcoin's price has dropped by 1.43% over the past week, raising concerns about its ability to quickly regain previous highs.

Analysts caution against risky trades, advising traders to remain cautious in the coming months.

In the context of broader economic factors, such as trade tensions and regulatory scrutiny, Bitcoin's trajectory remains uncertain.

Its recent price fluctuations have led some to question its status as a safe-haven asset, particularly after it fell below $80,000 following U.S. tariff announcements.

Some analysts predict that Bitcoin could break out of this consolidation phase and move higher, potentially reaching $94,000 by mid-March, driven by factors like increased institutional adoption and favorable market conditions.

However, risks remain, and investors are advised to consider both bullish and bearish scenarios before making investment decisions.

At the time of reporting, the Bitcoin (BTC) price was $90,187.55.