Bitcoin Set For Massive Price Movement
One thing is absolutely certain now – the next big – or should I say massive – price movement in Bitcoin is imminent
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In the absence of any solid fundamental drivers for crypto assets, Bitcoin has been displaying some fairly classic technical patterns since its first capitulation earlier this year. Since then, the beleaguered cryptocurrency has failed to regain its lost glory despite new-age pundits claiming time and again that the next bullish breakout is ‘just around the corner’.
And now, another classic pattern has decisively emerged over the past 3 months – the famous Bollinger Squeeze, or the narrowing down of volatility to very low levels compared to the period immediately prior. Notice how each wave on the weekly charts has seen price volatility contracting more and more.
According to Buy Bitcoin Worldwide, the 30-day volatility index for the world’s largest digital currency hit a 12-week low of 2.55% on Tuesday, its lowest level since July 10 and almost 5.5% lower from where it began the year at 8.02%.
One thing is absolutely certain now – the next big – or should I say massive – price movement in Bitcoin is imminent. The trouble is, its impossible to predict, based on charts alone, whether this is going to be a breakout or a breakdown.
We can only make best guesses based on a few key trends. For one, trading volumes in Bitcoin have been falling steadily. September marked the lightest month on the BitFinex exchange since April 2017, with 643,000 bitcoins changing hands, down from 920,000 the month prior and the all-time high of 2.12 million in December 2017. Alongside dwindling volumes, we have witnessed a steady decline in the RSI (Relative Strength Indicator) too. Both of these point to weakness and a ‘cooling off’ of interest in Bitcoin.
Though it’s impossible to predict – if I were forced to put my money on a particular direction, I would be betting on a breakdown. There are no real positive drivers in sight, and (although stranger things have happened before!) it’s hard to fathom why a breakout rally would ensue from this point on.
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