Bitcoin has found itself stuck yet again. As of the time of writing this, the cryptocurrency is trading at $8,230, which is a price that implies BTC is down a mere 0.18% in the past 24 hours (as of the time of writing this piece).
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While some analysts are expecting this non-action — sub-3% moves each and every day, for weeks on end — to continue well into November, analysts claim that it is only a matter of time before Bitcoin breaks out. Hard.
Bitcoin Price Volatility Inbound?
Popular cryptocurrency trader Josh Rager recently noted that the Bollinger Bands, a popular technical analysis tool used to determine rough trading zones for assets, have begun to pinch tighter on Bitcoin’s one-day chart. He quipped that previous pinching/converging BBands “led to moves to high volatility and strong price action.”
https://twitter.com/Josh_Rager/status/1186347206330277888
Josh Rager isn’t the only one expecting for volatility to soon return to the Bitcoin markets. Bloomberg reported Monday that “one technical gauge is showing dramatic price swings for the digital token may be primed for a return.”
The indicator the outlet was taking into account with this analysis is the Trading Envelope indicator, which uses moving averages to map out estimated ranges for assets — much like, if not nearly identical to the Bollinger Bands that Rager drew attention to:
“[The indicator is] at its narrowest since mid-September… A similar narrowing last month preceded a drop of more than 12% for Bitcoin on Sept. 24. In addition, Bitcoin closed below its opening price in six of the last seven trading sessions. The last time it exhibited that pattern — in mid-September — it lost about 20% in one week.”
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Ball in Bulls’ Court?
With volatility impending, a fair question to pose would be “is the cryptocurrency ball in the court of the bulls or bears?”
According to what NewsBTC has observed from analysts over the past few days, the bulls’ court, at least for now. A Bitazu Capital partner found that the Relative Strength Index, positive Directional Indicator, and negative Directional Indicator all have to reset to an important horizontal level,” he argued before adding that “such levels have only one job: to turn the BTC price around.”
Aside from that, a model that has predicted Bitcoin’s trends to at least an 80% accuracy this year has shown that BTC will begin to trend higher into the coming year, and thus most likely bottomed at $7,700.
Also, Brave New Coin’s Josh Olszewicz found that BTC is looking more bullish than otherwise. “4h $BTC – bull div held – range lows held – back above bband midline (20SMA),” he explained in a tweet.
Again, there are still valid bearish arguments. The most notable of these bearish arguments is the impending “death cross” for the Bitcoin chart. Analyst Chonis recently pointed out that Bitcoin’s 50-day and 200-day moving averages are currently facing down a “death cross” that may come to fruition in the coming week.
Should this technical pattern come to fruition on Bitcoin’s chart, it will show that bears have control of this market. As Chonis remarked, the last death cross, which was observed in 2018, marked the commencement of a long-term price correction.
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