Bitcoin Volatility Ready To Explode
Our Proprietary Volatility Measures Say Buckle Up
IN TODAY’S REPORT
What we cover: TECHNICAL ANALYSIS Edition. Two key volatility measures. Key takeaways.
An Edge To All Those Still Awake
Cats love to follow a bright red laser pointer.
Most dogs can’t help but chase a sprinting squirrel.
Fish get hoodwinked daily by cleverly colorful lures.
Noob traders love a blazing hot, stampeding market.
But take all that away and most soon fall into a long, deep Snow White sleep.
After the celebratory excitement and massive inflows following January’s spot Bitcoin ETF approvals faded, Bitcoin’s price action has — somewhat predictably — fallen into a lengthy and nuanced consolidation pattern. In short, Bitcoin lost its shine and most traders in turn lost interest.
It’s human nature to tune out at such times, yet as all veteran traders know, these moments often provide an edge. To be clear, an edge to all those still awake, vigilantly surveying the landscape.
In this Technical Analysis Edition, we’ll look at a few key charts which now suggest that Bitcoin’s slumber may soon end. Let’s get into it.
BITCOIN (BTCUSD). Bitcoin Daily Chart With 100-Day Moving Average.
First, Bitcoin’s current daily consolidation pattern continues to tighten, with the king crypto now basing just below the upper boundary of the symmetrical triangle which has been forming since the March peak. Interestingly, the March high and the subsequent May low correspond respectively to peak inflows and outflows from the spot Bitcoin ETFs.
TAKEAWAY: The current late May/early June base suggests that Bitcoin is poised to break higher, move up out of the large daily triangle, and challenge the all-time high set in MarchBITCOIN (BTCUSD). Bitcoin Daily Chart With REKTelligence Rangeometer (90).
Now let’s check out the REKTelligence Rangeometer indicator which rises when Bitcoin’s 90-day range narrows.
Designed to move higher when an asset’s 90-day closing range is dropping, a rising Rangeometer often precedes major price moves. In other words, as overall price volatility drops, the odds of a reawakening increase. We are currently at just such a moment. While the indicator is agnostic to the direction in which price could move, we’d favor an upside breakout in line with the existing trend.
TAKEAWAY: The degree of range constriction we're seeing right now in Bitcoin has preceded major price moves in the past, and suggests another major move may be right around the cornerBITCOIN (BTCUSD). Bitcoin Daily Chart With REKTelligence VOLticipation Indicator.
Lastly, the REKTelligence VOLticipation indicator compares short-term and intermediate-term historical volatility, rising when intermediate-term volatility exceeds short-term volatility. Now at a reading of around 3.0, this indicates that intermediate-term volatility is roughly three times greater than short-term volatility, a relatively unusual occurrence, and one that suggests a potential imminent breakout.
TAKEAWAY: Short-term volatility is quite low and this state is not expected to last. Look for a potential reawakening of volatility - and price action - in the relatively near futureThe dull nature of price action right now suggests the very opposite. Whether it’s days or a few weeks away, buckle up.
Until next time…
peace_love_crypto-DB
IMPORTANT DISCLAIMER
The information presented and made available in this newsletter is intended for educational purposes only. THE INFORMATION IS NOT AND SHOULD NOT BE CONFUSED WITH INVESTMENT ADVICE AND DOES NOT ATTEMPT OR CLAIM TO BE A COMPLETE DESCRIPTION OF ANY SPECIFIC COINS, TOKENS OR MARKETS OF ANY KIND, BUT RATHER EDUCATIONAL EXAMPLES OF THE APPLICATION OF TECHNICAL ANALYSIS AND QUANTITATIVE ANALYSIS TO THE MARKET. This information has been presented and prepared without regard to any particular person's investment objectives, financial situation and particular needs because as individuals come from diverse backgrounds, with diverse objectives and financial situations. This information is of a general nature only so you should seek advice from your investment advisor or other financial professional as appropriate before taking any action. The opinions and analyses included herein are based on sources and data believed to be reliable and are presented in good faith, however no representation or warranty, expressed or implied is made as to their completeness or accuracy. It is imperative to understand your investment risks since all stock investments involve significant risk. The user of REKTelligence’s newsletters, podcasts, courses, coaching and other educational services agrees to indemnify and hold harmless REKTelligence LLC from and against any and all liabilities, expenses (including attorney's fees), and damages arising out of claims resulting from the use of this educational content. REKTelligence LLC is not a licensed investment advisor.
© 2024 REKTelligence LLC