Bitcoin, return of volatility ?Hello avid investors and traders out there, I will make a little study market of Bitcoin.
Bitcoin is in weekly consolidation for the 9th consecutive week and last week's candle closed in doji for the third time in a row.
Suffice to say that nothing has been going on for 1 month and a half because the price is still in the range without giving any indication on the continuation with a 50/50 chance of breaking up or down.
The price is drawing a “pennant” triangle. The Pennant is a chartist figure of consolidation, very generally if it comes from an upward movement, it is statistically more likely to break on the upside.
On the other hand I always distrust this figure which very often gives false signals either by breaking first by the top, by drawing what is called a fakeout (break out which fails), or by breaking by the bottom of first and then cross the upward triangle.
Lately the traditional markets have not decided either. With each bullish momentum, there is a bearish momentum and the gaps to be filled move. The whole reacts significantly to each economic news whether "positive" or "negative".
Until the traditional markets decide to resume the uptrend or start a real correction, there is little chance that the Bitcoin market will come out of this consolidation. Furthermore, the correlation between Bitcoin and risky assets like # Sp500 is extreme ...
I recalculated the Expected Move option contracts on July 31 to see the volatility this month, according to traders and option investors. The EM calculation predicts a movement of 930 points which still leaves us in the range.
I remind you that the ME is a statistical analysis which makes it possible to obtain a cone of probability. There is a 68.2% chance that the price will close in the cone until the end of the contracts. According to the ME, there is still very little volatility to predict.
Traditional markets are likely to be quiet this summer like everyone else, so implicitly, there is a good chance that the Btc will be too.
At the start of the evening yesterday, Bitcoin tried to cross the $ 8,900 to encourage a large number of sellers to shorten. The bearish movement did not last long because yesterday's day ended with a huge daily hammer.
As a result of this movement many shorts were trapped in what is called a "Bear trap". Many shorts were trapped, resulting in many liquidations which allowed the rapid uptrend this morning.
In Daily time units the price of Bitcoin has trough above the previous one, the first signal of a possible trend reversal.
I remind you that last week Bitcoin went into a daily downtrend.
To have a structured short-term plan, I usually frame the last peak and last trough in what I call a decision rectangle. A bullish crossing would lead me to seek purchases while a bearish crossing would certainly lead me to seek sales.
If the last low of 8920 is maintained and the last peak of $ 9,300 is crossed upward, it is likely that the price will go to seek the $ 9,800, significant resistance.
On the other hand, if the trough is crossed downward, there is a good chance of first looking for the weekly resistance of $ 8,600. If this weekly support is crossed, the rebound zones likely to serve as supports remain the same as last week.
As long as the $ 6,000 level is maintained, Bitcoin still has chances to maintain its bullish bias and try to cross the $ 10,500 again. On the other hand, I doubt that the crossing of this resistance 10 500 will take place before the summer.
Follow closely the news of traditional markets and the trend of the SP500 because in the short term it is he who will dictate the conduct of Bitcoin
