Significant changes might take place in BTC price-There were two sides for the price volatility of bitcoin, and on either sides were people with their own theories of estimations and speculations. Time for those theories and speculations to reign again.

Bitcoin Price squeeze

It looks like there is a nearing end for the almost 3-4-month-old bitcoin price squeeze. What also seems to be a significant development is that the overall price volatility for Bitcoin seems to have hit a new low, which is the lowest in 2 years. This has given rise to many speculations over BTC prices.

The volatility index when measured by standard deviations across all the indexes, has been the lowest since the end of 2016. This can be backed by the Bollinger bandwidth, which is a technical analysis tool derived from +2, -2 standard deviations of a price’s moving average.

However, this low volatility for a long time may be the calm before the storm. Even with this low volatility index, people on either side of the price index speculations are excited that something big is going to happen after the low volatility.

Bollinger bandwidth diagram and daily chart (picture credits to trading.com)

Significant changes might take place in BTC price-BTC can be seen following a pennant pattern in the daily chart. As of when writing, the top edge (resistance) of the pennant is located at $6,800 and the lower edge (support) is seen at $6,300.

The Bollinger bandwidth which was explained in the earlier part of this article has been at its lowest since 21 months at 0.0975.

Simply going by the moving averages study on the long-term chat, we can say that there is a breach to occur for the Pennant pattern of volatility.

Monthly chart (picture credits to trading.com)

Since the second half of 2014, there had been no bearish crossover on the monthly chart when a 5-period and 10-period Moving Averages were studied. But now the things seem to be changing and there seems to be a bearish crossover in the same study.

BTC dropped from $6,841 in the weekends to $6,325 low. This has added more strength to the bearish crossover theory.

Probable Outcomes:

  • There can be soon a breach in the low volatility pattern, which means there can be a noticeable price volatility.
  • In the case of an upside breach, the prices of BTC may go high up to $8500.
  • Trends are towards a downside bearish crossover breach which suggests that BTC may hit a new low of somewhere around $5700 (June low).

 

 

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