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Bitcoin Volatility Continues to Plunge Lower
If you step back and view Bitcoin’s price action from a macro perspective, it would be fair to say that BTC has flatlined. For the past nine or ten weeks now, the leading cryptocurrency has been stuck in a consolidation pattern of 15%. Both bulls and bears have failed to maintain a breakout in either direction. As a result, the width of the Bollinger Bands, which spread apart during periods of high volatility, has reached extremely low levels. Brave New Coin analyst Josh Olszewicz the chart below, noting that the “bbands haven’t been this tight since November 2018.” Periods of low volatility per the Bollinger Bands are marked by the vertical lines.Chart of BTC's macro price action with the width of the Bollinger Bands indicator. Chart by Josh Olszewicz (CarpeNoctum on Twitter). Chart fromOlszewicz’s observation is important because, for those that don’t remember, Bitcoin crashed 50% in the two weeks after a consolidation from September-November. In some senses, the price action before the November 2018 crash is like the price action now: Bitcoin consolidated around a single price point for 2-3 months in both periods. The question is: will history rhyme or will Bitcoin rally to the upside?
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Consolidation Could Resolve Upward, Suggest Fundamentals
a senior commodity analyst at Bloomberg, the consolidation will resolve upward:“Volatility should continue declining as Bitcoin extends its transition to the crypto equivalent of gold from a highly speculative asset, yet we expect recent compression to be resolved via higher prices.”
Blahs? Benchmark Looked Similar Before Past Gains —
— Mike McGlone (@mikemcglone11)
Volatility should continue declining as Bitcoin extends its transition to the crypto equivalent of gold from a highly speculative asset, yet we expect recent compression to be resolved via higher prices.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from Last Time This Volatility Gauge Was This Low, BTC Dove 50% in 2 Weeks