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Bitcoin has been caught in the throes of an unrelenting bout of sideways trading, but the cryptocurrency is now flashing signs of weakness as it trades just above the lower boundary of this range.
Until BTC posts a sustained break below $9,000, its near-term technical outlook will still remain somewhat unclear.
That being said, one pattern that has been firmly established and tested on multiple occasions throughout the past 10 days does seem to suggest that the cryptocurrency could soon see a swift recovery back into the middle of its trading range.
There is another metric that also suggests Bitcoin’s next movement will be massive, as now could simply be the “calm before the storm” due to BTC’s realized 10-day volatility reaching yearly lows.
Bitcoin Poised to Rebound Due to One Pattern, But Mid-Term Outlook Remains Bearish
At the time of writing, Bitcoin is trading down just over 1% at its current price of $9,225. The cryptocurrency has been hovering around this level for the past 12-hours or so.
Overnight BTC faced a massive decline that sent it reeling from $9,500 down to lows of $8,990.
After its brief dip below the lower boundary of its multi-month trading range, the cryptocurrency was able to post a swift rebound that sent it back up towards its current price levels.
There is one technical pattern that has been formed and confirmed on multiple occasions throughout the past several weeks that seems to suggest a sharp rebound is imminent.
One analyst spoke about this in a recent tweet, while pointing to the attempted 4-hour cloud “death crosses” that BTC has formed over the past ten days, including the latest one sparked by its most recent decline.
He notes that each one has been followed by sharp “scam pumps” that allow the crypto to rebound. If this pattern repeats, BTC will likely soon venture back into the mid-to-upper $9,000 region.
“4h cloud nearly deathcrossed 4 times in the last 10 days – always followed by a scam pump. Is this the time we continue a correction or scam pump incoming?” He questioned.
Image Courtesy of Teddy. Chart via TradingView
This Data Suggests a Massive BTC Movement is Brewing
Bitcoin’s previous multi-week and multi-month bouts of consolidation have been followed by some of its largest movements.
That being said, it is highly likely that this next movement will be massive, providing Bitcoin with a clear mid-term trend.
Data from analytics platform Skew shows that BTC’s 10-day volatility has declined to its lowest levels of the year. This signals that volatility could be imminent in the days and weeks ahead.
“10D Realized Vol dropping to a YTD low of 30%. Calm before the storm?”
Image Courtesy of Skew.
Featured image from Shutterstock. Charts from TradingView.
