Compressions and triangles – Bitcoin (BTC) price continues to move in a tight range. Traders are watching for the direction of the next move, which will allow it to break out of the compression zone it has been stuck in for several days.
The Calm Ahead of a Major Bitcoin Price Trend
Bitcoin knows another very low volatility day, with an intraday high at $16,888, and a low at $16,778, today, October 5, 2023. The cryptocurrency is trading at $16,859 at the time of writing. The markets are currently entitled to a doji.
The founder and CEO of the asset manager Capriole Investments, Charles Edwardsunderlined this “very low level of volatility”, while indicating that when “Bitcoin comes out of extremely low volatility, the trend that follows tends to last “.
Bitcoin’s next move out of the current range could therefore give the major trend in the price of the cryptocurrency, which could be a sustainable bullish rebound, or another bear run.
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A compression of several days to interpret
the trader Scott Melker also referred to this relatively low level of Bitcoin price volatility, the day before yesterday, January 4, 2023. He shared a daily chart of the cryptocurrency price, with a Bollinger Band showing a squeeze of the last.
Can this compression be seen as an indicator of a major move to come? Reacting to the post of Scott Melker, the inventor of Bollinger Bands, John Bollingerstated that “prolonged compressions are rarely valid signals “, referring to his experience. He would rather prefer the “Squeeze and Go!” “.
Triangles to determine the bottom of these bear markets
After this dead calm in the markets, what direction will Bitcoin take? the trader Rekt Capital shared a graphic showing “ three triangles macro of cryptocurrency. The first triangle is formed by the fluctuations of its price during the bear markets of 2014. The second and the third concern the crypto winters of 2018 and 2022 respectively.
The first and the second triangle show that, in the past, Bitcoin has recorded declines 65% and 50% respectively, when its price broke the bottom of the triangle. According to Rekt Capital, since this rupture took place in 2022 – above $30,000 – Bitcoin then recorded a 50% decline until today.
Bitcoin has thus “entered this historical range”, and it could already have touched its bottom. In such a scenario, the cryptocurrency could soon begin a long bullish rally. But based on historical data, the bottom could also be below $12,000if Bitcoin records a 65% drop from that breakout point.
The price of Bitcoin is therefore undergoing an exceptional level of compression. The return of volatility to the markets could mark the start of a sustainable bullish rebound, or the fall to the bottom of this cycle.
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