Bitcoin Volatiliy Levels Hint “Great Sell Off” Skew Data Finds

Bitcoin’s 10-day realized velocity became the quietest in eighteen months on Monday as it retested levels last seen in November 2018. Readings on the BTCUSD 10-day Impending Volatility dropped to 20 percent, according to blockchain data analysis firm Skew. Meanwhile, the 3-month volatility fell to 64 percent, its lowest this year. At its highest, the 10-day Impeding Volatility was above 300 percent in March 2020. But now, the major decline in volatility points to a lack of clear directional bias – bullish or bearish – in the market. Bitcoin rose by more than 150 percent in the last three months leading up to the second-quarter close. The period of uptrend also saw the cryptocurrency failing to breach above a technical resistance area of $10,000-10,500. At the same time, its downside bias remained capped by reliable support above $8,600-9,000 area. The range is getting narrowed further in the last two weeks. As of late, the BTCUSD exchange rate has been unable to sustain its bullish bias above $9,400. Meanwhile, it has also failed to break bearish below $9,000. A prolonged period of low-volatility typically leads to a significant price move in either direction. The longer the price consolidates, the more violent is the breakout – be it bullish or bearish. But the circumstances around the 10-day Impending Volatility hitting its 18-month low points to a bearish move ahead, noted Skew. The portal reminded that the period of low volatility between September 2018 and November 2018 later led to a bearish breakout. As a result, the bitcoin price fell by more than 50 percent.“Last time we reached that level, we had the great sell-off of November 2018 shortly after,” noted Skew. The leading technical indicators point towards an imminent bearish correction on the daily chart. For instance, Bitcoin has just printed a Death Cross pattern between its 20-day moving average and 50-day moving average. Its occurrence – historically – hints a sell-off in the market. On the other hand, the cryptocurrency is also under pressure of a 3-year old descending trendline that is keeping it from attempting a full-fledged breakout. While bitcoin may keep correcting lower under the influence of bearish indicators, its likelihood of attempting a strong pullback from $8,000-8,600 area is also higher. The range coincides with the 50-week moving average in the BTCUSD weekly chart above. The same chart has also printed a Golden Cross between 20-DMA and 50-DMA. Its occurrence has mostly led the bitcoin price higher. Photo by Amirali Mirhashemian on Unsplash


All data is taken from the source: https://www.newsbtc.com/
Article Link: https://www.newsbtc.com/2020/07/06/bitcoin-volatiliy-levels-hint-great-sell-off-skew-data-finds/


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