Bitcoin has been anything but volatile this week. Consolidation has ruled since its big China driven pump on Monday but this decline in volatility may be the precursor to bigger things as it has in previous weeks.
Is Another Bitcoin Rally Coming?
Over the past 24 hours BTC has done very little. The four day consolidation has continued as Bitcoin trades on the 50 hour moving average around $11,800 according to Tradingview. There has been no retest of $12,000 and it bottomed out at $11,650, so a tightening channel is forming. This is usually a sign of a larger move to come and it could be to the upside if volatility is considered.
One crypto trader has looked at the volatility charts and correlated it with recent Bitcoin price rallies. Over the past two months the volatility has decreased twice before the next significant move up. A similar pattern is developing now as BTC trades sideways.
“Decrease in historical volatility (yellow zones) as the precursor of the growth start. The magnitude increases with each cycle, so this time the reaction (price growth) might come slightly later.”
This interesting angle could be tied in with volume which has also slid this week. During Monday’s spurt to $12,300, BTC volume increased to $24 billion, by the end of the week volume had dropped almost 30% to $17 billion, but price had only declined 3.5%.
Analysts are in agreement that a breakout is imminent but as usual, none of them have a crystal ball so direction is just guesswork. Resistance currently lies at $12k and this has proven to be quite a strong level to break in recent days. Above that lies the $12.4k and $13k levels while on the low side there is strong support at $11.5k.
Altcoins Frozen Over
The altcoins have had a miserable week with many of them dumping double digits since Monday. There is no change on altcoin markets as we start the weekend and a sea of red is all enveloping. Ethereum is still weak, hovering just above $210 as its market share drops to a 2.5 year low. At 85% down from its all-time high many are looking at ETH as a better bet for shorter term profits but at the moment the world’s second largest crypto token is totally deflated.
XRP has made it back over $0.30 but only just as Bitcoin Cash continues to fall, now below $320. Litecoin, which has just been recognized by the IMF, is also getting dumped still as LTC drops to $85 as all halving gains are liquidated. Nearly all the altcoins are in decline this Saturday as Bitcoin holds steady in preparation for another big move.