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Bitcoin’s bulls are currently attempting to propel the crypto back into the upper-$8,000 region, which comes as bulls start generating heightened buying pressure following BTC’s movement down to lows of $8,200 earlier this week.
It now appears that BTC could soon incur some massive volatility that spans across the entire crypto market, as historical data suggests that its monthly CME close – coupled with its tightening trading range – will catalyze a major movement.
Although it remains unclear as to whether this volatility will favor bulls or bears, the strength of the 2020 uptrend is likely to bolster the cryptocurrency’s bulls.
Bitcoin Pushes Higher, Taking the Crypto Market with It
At the time of writing, Bitcoin and the aggregated crypto market are trading up, with BTC climbing just under 3% to its current price of $8,600.
Other major cryptocurrencies have been able to climb in tandem with Bitcoin, with Ethereum and XRP both climbing 3% while Bitcoin Cash posted a notable rally of 11%.
In the near-term, it does appear that the markets are positioning themselves to see a short-term rally, although Bitcoin and other cryptos are still trading slightly below their local highs, which remain strong resistance levels that need to be broken above.
Big Cheds, a popular crypto analyst on Twitter, spoke about today’s BTC rally in a recent tweet, noting that it appears to confirm a 4-hour “W” bottom.
“$BTC #Bitcoin – Bulls strike back with a 4 hour W bottom (double bottom) breakout,” he said.
$BTC #Bitcoin – Bulls strike back with a 4 hour W bottom (double bottom) breakout https://t.co/mLvk2WRI63 pic.twitter.com/zUaIjBw2fB
— Cheds (Trading Quotes) (@BigCheds) January 26, 2020
CME Data Suggest a Violent BTC Movement is Inbound
Adding to the slight volatility seen today is the fact that Bitcoin’s monthly CME close is just a few days away, signaling that a massive bout of volatility could be imminent.
Joel – a Bitcoin commentator on Twitter – spoke about the data surrounding this monthly occurrence, noting that the majority of these closes result in negative movements.
“BTC CME Monthly Close is on Jan 31 -71% of weeks approaching the close are negative. -71% of Thursdays before the close are negative. -67% of closing days (Friday) are positive (71% if the week is negative, 82% if the day before is negative). Volatility also tends to increase,” he noted.
https://twitter.com/JofDom/status/1221476697037512705
However, it is important to note that the majority of this sample data does come from a firm bear market, which means it is skewed to favor sellers.
Regardless of this, it does elucidate that the likelihood of the markets seeing massive volatility in the coming few days is incredibly high.
Featured image from Shutterstock.
