Despite a lot of negative news and media FUD lately, Bitcoin has remained relatively stable with very low volatility. In previous instances, this has often preceded a massive move.
The last week or so would have been highly tumultuous for Bitcoin and crypto markets in the past, but the asset has hardly moved in terms of price. There was the KuCoin hack, the BitMEX imbroglio, and the POTUS catching COVID, and yet BTC remained resolute.
Analyst and chart guru, Willy Woo, has observed that volatility, trade volumes, and exchange revenues are currently at a low which means investor buying pressure could dominate the next move since exchanges are not selling so much BTC.
When volatility is at a minimum, it means trade volumes are at a low, which means exchange fees revenue are at lows, which means exchanges sell less BTC profits to fiat, which mean investor buy pressure dominates the next move.
ELI5: Bullish https://t.co/pAjtbSPtyh
— Willy Woo (@woonomic) October 5, 2020
Massive Move Inbound
It was also noted that Bollinger Bands have been squeezed into a very narrow channel which could also lead to a breakout. The inventor of the technical indicator, John Bollinger, hinted at the same premise.
“I am not that fond of prolonged Squeezes, it is not that they can’t work, they sometimes do, but I prefer the ‘Squeeze and Go!’ variety.”
Meanwhile, on-chain analytics provider Glassnode reported that the negative events of the past week have not had much effect on Bitcoin markets and it is fundamentally still strong.
— glassnode (@glassnode) October 5, 2020
Co-founder of 10T Holdings, Dan Tapiero, remarked on the bullishness at the moment, especially from mainstream media outlets such as Bloomberg.
“First time I can recall #Bloomberg analyst super bullish #Bitcoin forecast with real analysis. Surprising from mainstream and traditional source. 14k possible this year, 100k by 2025.”
Bitcoin Price Update
At the time of writing, Bitcoin was trading at $10,720, which is pretty close to where it was this time yesterday, and even this time last week.
An intraday high of $10,800 was touched during the Tuesday morning Asian trading session but resistance proved too strong and the asset fell back again according to Tradingview.com.
Analyst, Josh Rager, has noted that volatility could start building up here which would also lead to a big breakout this week. He added that Bitcoin needs to break above $11,150 to prevent a fall back into four figures. There is strong support in the $9,300 price zone.
Volatility building up
Compression continues for Bitcoin with a potential break coming this week
If Bitcoin can’t break above the zone above ($10,900 to $11,150) on the next impulsive move then Bitcoin likely continues to the downside sub $10k, IMO pic.twitter.com/OzULE9um4O
— Josh Rager 📈 (@Josh_Rager) October 5, 2020
The asset has been down-trending since its mid-August high, but up-trending since mid-March so its next direction is a difficult one to call.
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