Bitcoin has been trading in a range of $50,000 to $72,000 for the past few months. When will it break out of this consolidation range? Shubh Varma, co-founder and CEO of cryptocurrency research platform Hyblock Capital, says it will be soon.

Will Bitcoin reach a new all-time high?

In an interview, Varma said that Bitcoin is likely to reach a new historical high between the start of a new interest rate cut cycle by the Federal Reserve in September and the U.S. presidential election in November.

The number of open contracts for Bitcoin futures this year is much higher than last year. The number of open contracts reflects the level of trading activity in the market.

Varma said that although the number of open contracts has been increasing in the past few months, it has not reached the "expected level". He pointed out that investors need to see a significant increase in open contracts for Bitcoin price to show directional volatility.

Trading in U.S. Fed Fund interest rate futures has already reflected the possibility of the Federal Reserve's first rate cut in four years in September. Varma noted that along with the U.S. presidential election, this could lead to increased volatility. He said that this situation could be bullish for cryptocurrencies, especially if the expectation of a rate cut by the Federal Reserve eventually becomes tailwind for risk assets.

Varma believes that once Bitcoin approaches or even breaks the previous record high of around $73,700, it will be like a free advertisement for retail investors.

Valma said: "They will return to cryptos, the number of open positions will rise again, leading to further volatility, potentially causing another upsurge."

Traders are excited about the volatility.

Recently, the arrest of Pavel Durov, co-founder of the well-known social platform Telegram, due to regulatory investigations, also triggered a major shock in the coin circle.

Reportedly, after Durov was detained by the French authorities at Charles de Gaulle Airport, the Telegram-affiliated crypto token Toncoin has lost 3 billion USD since last Saturday, accounting for about 17% of its market cap. According to CoinMarketCap data, Toncoin is the ninth largest cryptocurrency by market cap.

Reports state that the specific reasons for Durov's arrest are not yet clear, but he may face multiple charges including terrorism, money laundering, fraud, drug trafficking, and dissemination of child pornography, and if convicted, he could face up to 20 years in prison.

A representative of Telegram stated that the platform complies with EU law. The representative said in a message to MarketWatch, "It is absurd to claim that the platform or its owners should be held responsible for its misuse."

Valma wrote in a recent report: "Despite the drop in Toncoin's price and the significant liquidation of derivative contracts tied to it, the number of open positions for this token has still hit a historical high over the past few days, indicating that traders are still actively participating, perhaps seeking to take advantage of the volatility."

In an interview, Valma said: "This gives us a clue that everyone is very eager for volatility."

He believes that when negative events related to major cryptocurrencies lead to a significant price drop, "you will usually see a consolidation and not many players are willing to take on this risk because of the uncertainty. However, trading activity in Toncoin has increased, indicating that the market is not just sitting on the sidelines but actively seeking opportunities even in an uncertain environment."