2 - 4 minute read
Bitcoin traders are anticipating a major move in the cryptocurrency’s price as it continues to trade within a narrow range around $28,000. Despite predictions of near-term targets of $25,000 and $30,000, there seems to be little headroom either side of the current spot price, which has resulted in limited price volatility. However, traders warn that “very calm” periods usually precede a large move, with a breakout for Bitcoin all but guaranteed. Michaël van de Poppe, founder and CEO of trading firm Eight, believes the longer Bitcoin stays in this range, the heavier the impulse will be, citing a strong continuation as a result of Bitcoin’s recent increase from $15,000.
Jurrien Timmer, director of global macro at asset manager Fidelity Investments, drew similar conclusions about the wider macro environment, noting that the S&P 500 has been moving within a sideways range for nine months, and like Bitcoin, is also due a breakout at some point. The direction, however, remains unclear and dependent on the Federal Reserve.
The Bollinger bands volatility indicator currently shows Bitcoin experiencing some of its least volatile intraday conditions of 2023, with a classic precedent for a breakout. Traders warn that the current liquidity reflects sentiment, with cryptocurrency being among the riskiest of risk assets with no guarantee of returns.
As Bitcoin continues to trade within a narrow range, traders are urged to proceed with caution, with no guarantees of imminent price increases. However, traders are optimistic about a potential breakthrough, encouraging traders to continue monitoring changes in trade volumes and volatility indicators.