• Bitcoin (BTC) enters into a heavy consolidation zone but altcoins look weak.
• Peter Schiff shares a scenario wherein the Bitcoin price could thrive.

The world’s largest cryptocurrency Bitcoin (BTC) has entered severe consolidation and is currently trading at around $41,000. As of press time, the Bitcoin price movement on the daily and the weekly chart is less than 0.5 percent.

Earlier today, Bitcoin saw a brief short squeeze in an attempt to break past $42,000. Popular crypto analyst Lex Mozkovski calls it the mother of all consolidations. Citing data from Glassnode, he explains that a “Record 775k BTC changed hands at around $38.7”.

Earlier on Monday, Bitcoin came under some pressure after reports that the EU was going to ban all Proof-of-Work (PoW) cryptocurrencies. But the EU parliamentarians voted against the proposal giving a sigh of relief to investors.

But the broader market perspective doesn’t look to be quite good at this point. Crypto analyst Michaël van de Poppe explains:

Altcoins are again showing a lot of weakness in the BTC pair, as they are dropping. Bitcoin still consolidating. Not the best signs for the markets, to be honest.

On the other hand, Bitcoin long-term holders are filling up their bags on an annualized basis. Glassnode data shows that “Long-Term Holders are adding to their balance at an annualised rate of 7.6x issuance. With ~900 $BTC in mined issuance per day, this means around 6,840 $BTC moving into LTH storage daily”.

Peter Schiff explains when Bitcoin can go up

In an unusual stand, Bitcoin critic and Gold buff, Peter Schiff, has explained the best-case scenario for the Bitcoin price to go up. Although that seems to be unusual as of now. In one of his latest tweets, Schiff writes:

For Bitcoin to go up the NASDAQ must go up and #gold must go down. For that to happen the #Fed must succeed in bringing #inflation down to 2% without harming the economy, which requires minimal rate hikes and big cuts to government spending. But in that scenario why own Bitcoin?

This seems to be a distant dream for now as the U.S. inflation numbers are already soaring close to 8 percent hitting a four-decade high. The market is currently in a very critical position. On one hand, the Fed has no option but to increase the interest rate to control inflation.

The crypto market has been largely following the broader equity market. Many analysts are stating that we are heading into a recession kind of condition. So if that happens, the crypto market could follow the correction in the global equity markets.

Although designed as an inflation hedge, the crypto has yet to prove its mettle. Extreme volatility has prevented Bitcoin so far from becoming a true alternative.