Bitcoin (BTC): Should we expect a sudden move?
Lately, crypto traders have mainly three phrases on their lips. They talk about “volatility,” “bond prices” and a “sharp move” ahead in the bitcoin (BTC) market. Analysts and Bitcoin traders agree that a storm is brewing because BTC’s volatility is unusually low. Is the calm that is being observed in the Bitcoin (BTC) market really a harbinger of a sudden move?
Towards a market bottom or a decoupling from the equity markets?
According to analysts and traders, there is bound to be a sign behind the recent stability of the bitcoin (BTC) price. The evolution of the BTC price could presage a sudden movement in the market. Indeed, the current situation could lead to a bottom in the Bitcoin market. The evolution of the crypto price also perhaps signals a break in its correlation with the equity markets.
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“In recent weeks, bitcoin prices have experienced an unusually low degree of volatility, in stark contrast to the equity, credit and currency markets, where central bank rate hikes, inflation, and a strong U.S. dollar continue to take their toll,” the letter read.
Meanwhile, research firm Delphi Digital said that a “big move” in the BTC market is to be expected. It used the Bollinger Band Width Percentage (BBWP) to make this statement. The BBWP happens to be a derivative of the Bollinger Band indicator. In addition, it is based on volatility. Delphi Digital explained that historically “BBWP readings above 90 or below 5 have marked major tipping points.”
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Indeed, since the second quarter of 2017, such readings have resulted in either a 204% rise or a -51% drop in crypto. But, it should be noted that currently, the BBWP has not yet dipped below 5. Moreover, it is too early to say, with certainty, that BTC will break its correlation with the equity markets.
For the past 120 days, bitcoin (BTC) has been trading between about $18,500 and $24,500. Currently, no one can determine where the crypto price will go once volatility peaks. However, it is best to be prepared for a movement in the price of BTC.
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