'Get ready' for bitcoin's volatility - 5 things to know in bitcoin this week

‘Get ready’ for bitcoin’s volatility – 5 things to know in bitcoin this week

Bitcoin (BTC) is starting a new week making everyone guess as the small trading range is still running.

The non-volatile weekend continues with the familiar status quo for BTC/USD, which remains just above $19,000.

Despite calls for a rally and an advance to lower macro lows thereafter, the pair has not made a decision on the path – or even signaling that a breakout or crash is imminent.

After a brief period of excitement seen on the back of US economic data last week, bitcoin is back in square one – literally, with price action now exactly where it was at the same time last week.

As the market wonders what it might take to break out of the range, Cointelegraph takes a look at potential catalysts in store this week.

Spot price action made traders dream of a breakout

For bitcoin traders, it’s a “very quiet” case when it comes to the BTC/USD weekly chart.

Having landed dramatically in volatile conditions during the first half of 2022, recent months have seen a strange lack of volatility.

Data from Cointelegraph Markets Pro and TradingView It proves the point – on the one-week timeframes, Bitcoin continues to print candles with absolutely no one around.

This is how constancy the current range is, as Cointelegraph reported, Bitcoin’s historical volatility index (BVOL) at lows seen only a handful of times.

“Equity volatility (VIX) relative to Bitcoin volatility (BVOL) is near all-time highs,” said William Clemente, co-founder of Reflexivity Research and digital asset research, added In the comments last week:

“This shows how much volatility pressure Bitcoin is currently facing.”

The accompanying chart has accurately captured Bitcoin as an intriguingly stable pick in the current climate, with Clemente noting that a return to a more volatile classical model should follow.

In the previous week, economist, trader and entrepreneur Alex Krueger additionally pointed That “explosive action” has followed all previous excursions to the lowest macro levels in BVOL.

He said the overall US data lacked expectations “that it would” in terms of reviving volatility, but in this case, the numbers remained just below the trigger range.

Cryptocurrency research firm Delphi Digital agreed.

“Historically, when the BVOL index drops below the value of 25, a significant spike in volatility tends to follow shortly thereafter.” advertiser In a piece of Twitter comments.

Meanwhile, this week, popular cryptocurrency investor and analyst Miles Deutscher Tell Traders “to get ready” while commenting on Delphi data.

Annotated chart of the Bitcoin historical volatility index (BVOL). Source: Delphi Digital / Twitter

The question for everyone remains is which direction the market will take volatility.

For Il Capo of Crypto, a trader who predicted Bitcoin dropping to $20,000 levels from all-time highs, the predictions remained the same.

$21,000 should emerge as part of a rebound retracement, only to be breached by a fresh dive to multi-year lows for BTC/USD and potentially $14,000-$16,000.

“Some Chetcoins are going to face scams these days, while Bitcoin hits $21,000. This might give you the illusion that the bull market is back. warned during the Weekend:

My advice: don’t be greedy. Take profit if this happens. Protect your capital.”

Annotated BTC/USD chart. Source: Il Capo of Crypto / Twitter

New macro triggers line up for cryptocurrency

While little is expected from the Federal Reserve regarding immediate policy changes this week, there is still plenty of firewood for cryptocurrency volatility due to be provided by outside forces.

In the US, corporate profits will come in thick and fast, with tech stocks in particular poised to move the markets in the event of a mis-expected outcome.

Reporting companies account for more than 20% of the S&P 500 and, like other US indices, are showing rare weakness this year.

RealVision founder and CEO Raoul Pal predicted, “In my opinion, the odds of a drop in the next week or two are decently high,” along with the accompanying chart:

“Weekly DeMark hits SPX next week, near channel bottom and 50% retracement, with bearish sentiment registered.”

S&P 500 futures chart. Source: Raoul Pal / Twitter

Planning for the next week, the source of financial comments similarly Kobeissi letter Tell Subscribers should “prepare for more volatility”.

He explained that more US data will join earnings this week, while Fed officials will comment on policy.

The average bear market with a recession dating back to 1929 is down 39% Wrote On the strength of the stock market in a different publication over the weekend:

Moreover, the average bear market with a recession lasts for 16 months. We are currently only 10 months away and the S&P 500 is down only 28%. History still indicates that more pain awaits us.”

Away from the stocks, the US Dollar Index (DXY) has been happily flat in the new week, so far avoiding another attack on the twenty-year highs seen earlier.

Echoing the Il Capo theory of Crypto, Michael van de Poppe, founder and CEO of Trading Eight, behold It could be this week or next where “some comfort” will enter risky assets more broadly.

“An important area for Bitcoin, because it has been hovering in the range for more than a month,” he said Summarization in a day:

“It needs to clearly break $19.4-19.6K. If that happens, volatility can finally kick in. Looking at the DXY dollar structure and returns, I expect this to happen within 1-2 weeks.”

US Dollar Index (DXY) 1-day candlestick chart. Source: TradingView

Echoes of the risks of an RSI crash 2018

Moreover, the Bitcoin picture is getting more murky, and those bearish scenarios from the current chart data are busy directing comparisons to the 2018 bear market bottom.

Among them is famed analyst Matthew Hyland, who even in his iconic bull market doesn’t have much to celebrate when it comes to Bitcoin price action in the next few months.

In a tweet from this weekend, Hyland outlined the Bitcoin Relative Strength Index (RSI) Repetition The behavior was seen while preparing for the 2018 floor.

The accompanying chart clearly demonstrated familiar bear market forces, as well as doubts that the fourth quarter of 2022 could closely mirror the viewer four years ago.

Stockmoney Lizards trading account confirmed “100% Agree” with the idea using the 3-day chart.

BTC/USD comparison charts with the RSI. Source: Matthew Hyland / Twitter

The 2018 RSI breakout structure included a dive from $5,500 to $3,100 for BTC/USD – or close to 40%.

“Obviously we are still waiting for this next huge step,” Hyland added In a related video about the idea.

It also showed that the classic Bollinger Bands volatility indicator is still anticipating a coming storm, as narrow ranges require a volatility breakout.

BTC/USD 1-day candle chart (Bitstamp) with Bollinger Bands. Source: TradingView

Scammers stay determined as ever

Take a look at the rambler’s behavior and it becomes clear that the resolve of the Medium Long Term Bearer (LTH) remains constant.

The latest data from on-chain analytics company Glassnode Confirms The highest level in five years in the number of Bitcoin lost or out of circulation in cold storage.

The ‘Stack or Lost’ metric put the total at 7,554,982.124 BTC – or 40% of current supply – as of October 17, meaning that more BTC is out of the market than at any time since late 2017.

Chart of BTC amount of coins traded or lost. Source: Glassnode / Twitter

Likewise, distribution too continuous An accelerating trend visible throughout 2022. The number of wallets holding at least one full Bitcoin balance has now reached an all-time high of over 908,000.

While the trend is generally increasing during the latter half of 2021, the trend has gained significant momentum this year, Glassnode explains.

The number of BTC addresses containing 1 graph + coins. Source: Glassnode / Twitter

Meanwhile, an analysis of the missing coins as part of its weekly newsletter, “The Week On-Chain,” concluded that the current bear market has yet to match others in terms of intensity when it comes to traders.

“Network profitability hasn’t quite reached the same level of severe financial pain as previous cycles, however, adjusting for lost and long HODLed coins could explain a reasonable part of this difference,” explained last week.

However, when it comes to those accustomed to dealing with bear markets, there seems to be little willingness to give in from current price levels.

Fear enters its second month in a row

There seems to be nothing to shake off fear when it comes to sentiment in the cryptocurrency market.

Related: ‘No Emotion’ – Bitcoin Scale Gives $35,000 Next Low for BTC Price

In a mark that has taken over the industry this year, the Cryptographic Fear and Greed Index He now has a feeling of ‘fear’ or ‘extreme fear’ for two months in a row.

Fear and greed use a basket of factors to calculate the corollary to market sentiment, and 2022 has yielded results unlike most years.

Earlier, the index experienced its longest-ever streak in “extreme fear,” a feat still one month away from repeating.

As of October 17, the index is at 20/100 volume – about 10 points above classic bear market lows but a full 14 points above this year’s low.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.