Bitcoin (BTC) has started a new week and has maintained a small trading range, so everyone’s guessing.
A volatile weekend continues the familiar status quo for BTC/USD just above $19,000.
Despite the rally and calls for execution to lower the next macro low, the pair has yet to make a decision on its trajectory, or even suggest a breakout or breakout is imminent.
After the brief excitement behind last week’s US economic data, Bitcoin is back at the drawing board – literally, with price action exactly the same as it was during the same period last week.
As the market wonders what it will take to break out of this range, Cointelegraph will be looking at potential catalysts this week.
Spot price action has traders dreaming of a breakout
For Bitcoin traders, it’s a case of “almost too quiet” when it comes to the BTC/USD weekly chart.
Volatility has been eerily lacking in recent months after a large and volatile fall in the first half of 2022.
Cointelegraph Markets Pro and TradingView To prove the point — in a one-week timeframe, Bitcoin continues to print candles with almost no one around.
As reported by Cointelegraph, Bitcoin’s Historical Volatility Index (BVOL) is the persistence of its current range at lows seen only a few times.
“Equity volatility (VIX) relative to Bitcoin volatility (BVOL) is nearing an all-time high,” said William Clemente, co-founder of digital asset research and trading firm Reflexivity Research. Added Comments from last week:
“This shows just how much volatility compression Bitcoin is currently experiencing.”
The accompanying chart neatly captures Bitcoin as an oddly stable coin-esque pick in the current situation, and Clemente suggests that a return to the classic, more volatile paradigm should continue. .
A week ago, economist, trader and entrepreneur Alex Krueger added I got it That the “explosive move” followed all previous trips to BVOL’s macro lows.
He argued that US macro data had fallen short of expectations in terms of a resurgence in volatility, but in reality the numbers were just short of the trigger range.
Delphi Digital, a cryptocurrency research firm, agreed.
“Historically speaking, when BVOL falls below a value of 25, it tends to be followed quickly by large spikes in volatility.” said Some of the Twitter comments.
Meanwhile, this week, popular crypto investor and analyst Miles Deutscher said: Said Traders need to “get ready” while commenting on Delphi data.
The question for everyone was which direction the volatility would lead the market.
For Crypto trader Il Capo, who predicted that Bitcoin would fall from all-time highs to $20,000 levels, expectations remained the same.
$21,000 should work as part of a relief bounce, but these could be $14,000-$16,000, devoured by BTC/USD’s new plunge to multi-year lows.
“Some shitcoins will experience a pump of fraud these days, but $BTC will hit 21,000. This could give the illusion that the bull market is back,” he said. rice field. warned weekend:
“My advice: don’t be greedy. Take profits if this happens. Protect your capital.”
New macro triggers for cryptocurrencies line up
While little direct policy change is expected from the Federal Reserve this week, there is still plenty of firewood against crypto volatility provided by outside forces.
In the United States, where corporate earnings are growing rapidly, technology stocks in particular could move the market if earnings fall significantly below expectations.
Reporting companies make up more than 20% of the S&P 500 and, like other US indices, have seldom weakened this year.
“In my opinion, the odds of a low in the next week or two are pretty high,” RealVision founder and CEO Raoul Pal predicted overnight, along with accompanying charts.
“SPX weekly demark hits 50% retracement near channel bottom next week, with bearish sentiment for RECORD.”
As well as charts from a week ago, financial commentary resources, Kobeissi Letter Said Subscribers should “prepare for more volatility”.
Explaining more US data will join earnings this week, Fed officials comment on overall policy.
“The median bear market of the recession dating back to 1929 fell 39%.” I have written In one of the various posts over the weekend about the strength of the stock market:
“Furthermore, the median recessionary bear market lasts 16 months. Now, in just 10 months, the S&P 500 is down just 28%. History has more pain ahead of us. I keep suggesting that.”
Outside of equities, the US Dollar Index (DXY) has been relentlessly static into the new week, so far avoiding the attack on the 20-year highs seen previously.
In response to Il Capo’s theory of Crypto, Michaël van de Poppe, founder and CEO of trading company Eight, said: alluded to “Some easing” in risky assets more broadly could come this week or next.
“Bitcoin is still in a range for over a month, so it’s an important area for Bitcoin,” he said. wrap up On that day:
“We need a clear break below $19.4-19.6K. If that happens, volatility could finally kick in. Given the structure of $DXY and yields, this could happen in a week or two. I expect to.”
RSI Breakdown Risk Reflects 2018
Additionally, the situation for Bitcoin is getting darker, and bearish scenario forecasts from current chart data are busy comparing it to the bear market bottom of 2018.
Among them is popular analyst Matthew Hyland. He has little to celebrate when it comes to his BTC price action in the coming months, even in his signature bull market.
In a tweet this weekend, Hyland flagged Bitcoin’s Relative Strength Index (RSI). repeat Behavior seen in the build-up to the 2018 floor.
The accompanying chart clearly shows the familiar bear market forces at work, reinforcing suspicions that Q4 2022 may closely reflect what happened four years ago. increase.
Trading account Stockmoney Lizards has confirmed that they “100% agree” with the idea of using a 3-day chart.
The 2018 RSI breakout structure saw BTC/USD plunge from $5,500 to $3,100, or about 40%.
“Obviously we are still waiting for this big move to come,” Hyland said. Added With a related video about the idea.
He further showed that the classic Bollinger Bands volatility indicator still predicts the coming storm, and that narrowing the band calls for a volatility breakout.
Hodler remains determined
A look at Hodler’s actions reveals that the determination of the average long-term holder (LTH) remains unwavering.
Latest data from on-chain analytics firm Glassnode Confirm The number of Bitcoins lost in cold storage or out of circulation is at a five-year high.
As of October 17, the “coins held or lost” metric stands at 7,554,982.124 BTC, 40% of current supply, and no more BTC on the market at any time since late 2017. means
Similarly, distribution Ongoing We will see an accelerating trend through 2022. The number of wallets with at least one overall Bitcoin balance is now over 908,000, an all-time high.
Glassnode shows that this trend is gaining noticeably more momentum this year, with an overall increase through the second half of 2021.
Meanwhile, Glassnode, which analyzed the lost coins as part of its weekly newsletter, The Week On-Chain, said the current bear market is still comparable to other markets in terms of its intensity when it comes to Hodler. I concluded no.
“Although the network’s profitability has not quite reached the same level of severe economic distress as in past cycles, the adjustment for the long lost HODLed coin could explain a reasonable portion of this divergence. .” explained last week.
That said, for those accustomed to navigating bear markets, there appears to be little desire to capitulate from current price levels.
Fear enters for 2 months in a row
When it comes to crypto market sentiment, fears seem unwavering.
RELATED: “No Sentiment” — Bitcoin Metric Gives $35,000 As Macro Low For Next BTC Price
In the sign that swept the industry this year, Cryptosphere & Greed Index have sentiments of “Fear” or “Extreme Fear” for two consecutive months.
Fear & Greed used a set of factors to calculate a normalized score for market sentiment, and 2022 yielded a different result.
Previously, Index saw its longest stint ever on “Extreme Fear.” This is now repeated after a month.
As of October 17, the index measured 20/100. That’s about 10 points higher than the bottom of a traditional bear market, but 14 points higher than this year’s low.
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