2018-10-2 18:04 |
Bitcoin continues to consolidate as it reaches 2018 lows regarding volatility. The Average True Range (ATR), a proxy for volatility, is currently trading at 240. At the start of 2018, ATR was trading at the enormous value of 2000. With ATR trading at yearly lows, it makes a breakout more likely as periods of low volatility are followed by periods of high volatility and vice-versa. But what way is it going to break out is the big question.
The key pattern to analyze for forecasting price action is the descending triangle pattern we have been forming since January. This pattern is now approaching its conclusion, and the traditional way for such a pattern to play out would be a drop below the support which is around $6000 and a hard drop below. In this case, $6000 is likely to turn from support into resistance and price action may struggle to get enough buying momentum to rise back above.
However, many analysts are forecasting a bullish breakout after some bullish signs have been recorded recently. Price has been forming higher lows, and the MACD has also been increasing showing more buyer momentum. A third potential scenario is a continuation of the low-volatility consolidation we have seen where the pattern breaks down, and the price continues to trade in a tight range.
Bitcoin Daily Chart – Source: Tradingview.comThe short-term outlook is currently more bearish with the MACD diverging from the centerline to the downside showing increasing seller momentum. RSI is also forming lower lows and lower highs. Price is currently trading above $6500 at the time of writing. As long as the price does not drop as far as $6350, a higher low will likely be recorded.
Bitcoin Hourly Chart – Source: Tradingview.com Key Takeaways: Volatility at lows of 2018 which can make a breakout more likely. The descending triangle would forecast a bearish breakout, but many analysts are forecasting bullish breakout after the recent series of higher lows. Shorter-term outlook is bearish. DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.Bitcoin Continues to Consolidate As Volatility Reaches Lows of 2018 was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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