Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Bitcoin May Be On The Verge Of A Powerful Move

Published 10/23/2018, 12:10 AM
Updated 07/09/2023, 06:31 AM

After its powerful surge in late-2017 and stunning plunge in early-2018, Bitcoin’s volatility has died down significantly as it settles into a narrowing range just above its key $6,000 support level. This narrowing pattern appears to be a descending triangle, which has very bearish implications if the cryptocurrency breaks below the key $6,000 support level in a convincing manner with high volume.

A decisive break to the upside, however, would increase the probability of further bullish action. Either way, when a market narrows to a fine point like Bitcoin is, it typically indicates that a volatile move is likely ahead, upon a final breakout or breakdown.

Bitcoin Daily Chart

The weekly Bitcoin chart puts this descending triangle pattern into perspective a bit better:

Bitcoin Weekly 2013-2018

Bitcoin volatility is at unusually low levels according to Bollinger® BandWidth (a volatility indicator), which means that there is a high probability of a strong move soon:

NYSE Bitcoin Index Weekly 2014-2018

I will be watching closely for a breakout or breakdown to confirm this descending triangle pattern.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.