Bitcoin may soon move out of its seven-week trading range of $30,000 to $40,000, with an indicator tracking the cyclical nature of price volatility suggesting a big move is overdue.

  • Bollinger bandwidth, a measure of volatility calculated by dividing the spread between the Bollinger bands by the 20-day average of the cryptocurrency's price, has declined to a 2 1/2-month low of 0.15.

  • The cryptocurrency saw big moves in December and April after the bandwidth fell to 0.15.

  • Bollinger bands are volatility bands placed two standard deviations either side of the 20-day average of price.


Bitcoin's daily chart
Source: TradingView

  • Bitcoin dropped from $60,000 to $48,000 after the Bollinger bandwidth dipped to 0.15 in mid-April.

  • A similar reading in December paved the way for a bullish breakout from the multi-week price consolidation below $20,000.

  • The cryptocurrency saw big moves during the 2017 bull run each time the bandwidth narrowed to 0.15.

  • Moves signaled by Bollinger bandwidth are direction-agnostic, as history shows. It means the anticipated change can be bullish or bearish.

  • The forthcoming Grayscale unlockings and blockchain data pointing to renewed buying by wealthy investors indicate that this time the move is likely to be bullish.

  • The upside is expected to gather steam above the 50-day moving average (MA) resistance, currently at $36,000.

  • "We expect buyers to step in above the 50-day MA," Katie Stockton, founder and managing partner of Fairlead Strategies, said in a weekly research note published Monday. "A breakout above the 50-day MA would indicate a test of $44,000-$45,000 resistance."

  • A move below $30,000 could bring deeper losses, she said, indicating that is a less likely outcome.

  • While concerns of an early scaling back of stimulus by the Federal Reserve pose a downside risk, the minutes of the Fed's June meeting scheduled for release at 18:00 UTC Wednesday are unlikely to be as hawkish as the June policy statement.

  • "Between weaker U.S. data and the Fed's desire to temper hawkish bets, the Fed minutes could sound more cautious and balanced than the FOMC statement and Fed projections," BK Asset Management's Kathy Lien said, according to FXStreet.

  • According to some analysts, bitcoin (BTC, +1.97%) digested most of the negative news during the mid-May sell-off from $58,000 to $30,000. As such, the downside, if any, appears limited.

  • Bitcoin is trading near $34,700 at press time, representing a 1.6% gain on the day, CoinDesk 20 data show. 

All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Shiba Inu enters 96% bull run as whales continue accumulating SHIB

Ethereum whale bought $11.5 million worth of SHIB tokens on Tuesday. Shiba Inu token has reached 783,739 holders, large wallet investors accumulate SHIB tokens through the dip. SHIB was briefly the cryptocurrency with the largest turnover on exchanges Binance and Coinbase on Monday.

More Shiba Inu News

Three reasons why MATIC price will breakout to a new all-time high at $4.5

MATIC price breached a crucial resistance level that has prevented it from rallying four times over the past four months. The recent attempt seems to have an extra oomph behind it, hinting that this run-up could trigger a massive move.

More Polygon News

XLM price eyes 55% breakout if Stellar bulls can flip one crucial barrier

XLM price has been stuck trading under a crucial blockade for nearly five months. The situation is set to change soon, however, as Stellar coils up for an explosive breakout.

More Stellar Lumens News

Terra's Do Kwon files lawsuit against SEC while analysts turn bullish on LUNA

Do Kwon, Terraform Labs CEO, was served a subpoena by the SEC while appearing at Messari's Mainnet conference. According to Do Kwon and Terraform Labs' lawsuit against the SEC, the regulatory agency lacks jurisdiction over the plaintiffs. 

More Terra News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast