We present you a translation of an article analyzing the Bitcoin market from analyst Omkar Godboul. In the article, he gives his forecast for the development of the situation in the cryptocurrency market: price volatility has fallen significantly over the past 12 months, the bear market has literally destroyed the speculative rush.
Daily volatility, represented by a spread between the high and low of the price, was $ 61 yesterday, which is 98% lower compared to $ 3468 recorded on January 16, 2018. This is not surprising, given that BTC has depreciated by 74% from $ 13,836 (price January 16, 2018).
It is worth noting that on January 16, the daily volatility was extremely high (the percentage difference between the minimum and maximum was 26%). This indicates that insane crypto excitement reached its peak last January.
At the same time, with the onset of last year, volatility decreased. For example, the average daily volatility in the first quarter of 2018 was $ 973. In the next three quarters, the figure fell to $ 345, $ 245 and $ 195, respectively. In percentage terms, the average daily volatility in the fourth quarter fell to 3.6%, while in the first quarter it was 9.14%.
The new year began quietly. Daily volatility basically remained below $ 200 and reached a 2.5-month low of $ 45.17 on January 12th. Many believe that lowering volatility is a sign that speculators are leaving the market, and the cryptocurrency itself is approaching the bottom of the correction.
It is worth noting that a long period of low volatility usually ends with a significant movement to one side. Thus, BTC may soon break out of the 6-day trading range of $ 3500 $ -3700.
Moreover, a downward breakthrough is more likely, as long-term technical indicators favor bears. At the time of writing this article on Bitstamp BTC is trading at $ 3585.
BTC fell 13% last week, reinforcing the bearish position represented by the downward 10-week moving average ($ 3,919).
The outlook remains bearish as long as the BTC keeps below the 10-week moving average.
BTC has formed a diamond pattern on the 4-hour chart. Downward breakdown (closing the 4-hour candle) below $ 3,575, if confirmed, will signal a resumption of the sale from a maximum of 10 January ($ 4,036). This may lead to a deeper drop to the December low ($ 3122).
Relative Strength Index (RSI) favors bears (41.00). Thus, there is a possibility of further sales after the downward breakthrough.
Simply put, the chances that the BTC will make a downward break of the $ 3,500-$ 3,700 range will increase significantly if the bearish break of the rhomboid pattern is confirmed.
The forecast for the future of
BTC is likely to make a downward break in the range of $ 3500 -3700 $.
The target of $ 4000 will be relevant if the bulls oppose the upward break of $ 3700 to bears.