For Bitcoin, as with all risk markets, this week could be crucial. Repeatedly publishing figures on China’s inflation or trade balance could play a dominant role in macroeconomic indicators. All this in the context of the conflict between Russia and Ukraine, which is apparently intensifying.
Bitcoin is still stuck under $20,000, volatility is low!
Over the past several weeks, the 20,000 dollar threshold has played the role of a resistance level that seems difficult to cross. As shown in this graph, offered by the platform Coinmarketcap and showing the price of Bitcoin over the past week:
Between October 4 and 6, the $20,000 level was tested several times. Before the markets rejected it for the last time last Friday. As of this writing, the token is trading at just over $19,200.
Last weekend, volumes remained low on Bitcoin. This is also a trend we have been observing for weeks. Volatility is now relatively low around Bitcoin, as can be seen from the following chart showing Bitcoin weekly candles from 2021. Over the past 4 weeks, volume has remained remarkably flat. For 2 years, the market was not so calm for such a long period.
Big move coming in November?
Due to this lack of volatility in the asset some observers say that a powerful move could begin in the coming weeks. Calm before the storm. As trader Jordan Lindsey recently told his Twitter followers.
A big move up or down is coming.
To defend his position, Lindsey steps forward the BVOL indicator. This is an indicator that measures the volatility index of Bitcoin. Currently, this indicator is lower than ever. Points that the mother of cryptocurrencies is only involved in on very rare occasions. In October 2018, Bitcoin was showing a BVOL almost similar to what we see today. A few weeks later, the asset fell close to $3,000, losing almost 50% of its value. A view also shared by William Clemente, co-founder of digital asset research and trading firm Reflexivity Research:
Currently it (the BVOL indicator) is again below the 36 level and this indicates that a very big move is coming early this month or probably in November.
Some features could send Bitcoin!
Although some observers believe that the calm dead period may last a few more weeks, various aspects of Bitcoin may revive in the coming days or months. Starting with the level of inflation in the United States, whose September figures are to be published next Thursday. If the consensus is aiming for 8.1%, the real data could once again play a strong role in the price of Bitcoin. Before that, FED minute scheduled for Wednesday could already bring the LA on the market.
If the macroeconomic variables have been in the foreground for weeks, the conflict between Russia and Ukraine is back in the foreground. Between the two camps, the tension seems to be rising again. And that could have an impact on all the risk markets.
What about market sentiment?
The Crypto Fear and Greed indicator is also quite stable for a few days. At the time of writing these lines, yes 22/100, which has remained within the standards of recent weeks. Many observers note that the market follows the same cycle times as in 2014 or 2018.
By comparing the last cycles, many believe that Bitcoin and the crypto market may be near the bottom. In fact, during previous declines, Bitcoin saw its price fall 73 to 80% between the last historical peak and the lowest point, leading to a reversal of the trend. We are close to this first threshold of 73%.
In the long term, the halving of Bitcoin predicted for the end of 2023 could give digital assets more momentum.