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October 3, 2022
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Bitcoin

Bitcoin Volatility decreases to a month low

The reference cryptocurrency has chartered lower highs and lower lows (wedge) since the beginning of January, and the lack of a strong market bias has made bears and bulls look for clues. As a result, the volatility represented by the width of the Bollinger Bands – a technical tool represented by +2, -2 standard deviations from an asset’s moving average – reached its levels at the end of December.

Tradingview website – Chart Analysis

It is worth mentioning that a prolonged period of low volatility typically paves the way for a stronger directional bias. This means that Bitcoin will soon be able to witness major price movements in any direction.

Analysts at independent trading company TradingShot believe that the cryptocurrency would move upwards, based on the complementary bullish signals presented by its 50-period moving average. The BTC / USD exchange recently closed above that wave, while recalling its ability to provide protection against wild bull races.

Bitcoin Analysis 02
Tradingview website – Chart Analysis

TradingShot noted the same in its recent note, calling the 50-period moving average “an important short-term indicator”.

It provided excellent support for Bitcoin’s parabolic rise in late 2020, ”added analysts. “In fact, as you can see in the chart below, we can count 15 clear rejections since October 2020, and only 2 times has it broken.

They now expect Bitcoin to experience a “sustainable bullish trend” in February, if the 50-period moving average remains strong. Meanwhile, TradingShot stated that Bitcoin’s LMACD indicator warns of a bullish cross, which further increases the bullish bias in the cryptocurrency market.

Bitcoin Analysis 03
Tradingview website – Chart Analysis

Bitcoin is now trying to close above its 200-period (orange) moving average wave to confirm its extended bullish bias. A successful escape move would have bull testing levels above $ 40,000 as its primary targets – amid increased volatility.

Daily Bitcoin Chart

Meanwhile, the Bitcoin one-day chart shows the price trying to break above the Bollinger Band average band, representing the 21-day moving average.

Bitcoin Analysis 04

A successful breach above would cause investors to test the top of the Bollinger Bands as their short-term bullish target. It is close to $ 38,500. On the other hand, a fall in the middle band would risk sending the price back to the lowest $ 31,000.

Source: BitcoinIst

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