The decrease in volume and the side action of prices indicate that the volatility of Bitcoin prices will soon increase.
The markets haven’t had much movement over the last 2 months, as the Bitcoin price (BTC) has remained in the range of $10,200 to $11,000. In the last few days, the range has narrowed even more, leading some traders to forecast a breakout.
However, the Bitcoin Blueprint price hasn’t shown any direction, while the altcoins have taken a downward slope. Most markets suffered massive corrections and this isn’t a strong signal to the overall market.
Bitcoin Price Still Stuck in a Lateral Range
BTC/USD 1-day chart
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The Bitcoin daily chart shows the continuation of the limited range construction that began after the price fell below the crucial barrier by $11,200 – 11,400.
As long as the Bitcoin price remains below this resistance zone, it’s unlikely that a strong upward movement will be expected. However, the Bitcoin price is reaching a high as the volatility is running out.
Once the volatility begins to disappear, the volume also falls, resulting in a very volatile movement.
Bitcoin 7 day volatility index
Despite all the negativity that surrounds the crypto market recently, Bitcoin’s volatility has been decreasing. Even after the KuCoin hack, BitMEX was sued and the FCA banned crypto-derivative trading, the price of Bitcoin didn’t react negatively.
In fact, Bitcoin’s price stabilized in its most recent moves, which isn’t a sign of weakness. Also, the documented rise in new directions suggests that a possible upward movement is waiting to happen.
However, will such a move take place in the markets or will it only take place with the price of Bitcoin?
A correction had to be made after the massive increases in several cryptosystems in all areas. The question is whether this correction is finished or whether more corrections are expected.
The total capitalization of the crypt market hangs between the key levels
Total crypto market cap 1-day chart
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As the price of Bitcoin fluctuates between levels, so does the total market capitalization of the entire industry. What the chart shows is a clear breakdown of support, after which it has ranged from $307 to $338 billion.
As with Bitcoin’s movements, there’s no clear direction in the short term. Since Bitcoin’s momentum towards $12.4 billion, the price of Bitcoin has been on a downward trend. However, since the massive crash in March, the trend has been upward.
In that sense, a possible lower Bitcoin confirmation in the $9,000 region would still warrant an upward perspective, as it’s a higher minimum within a massive uptrend.
Total crypto market cap 1-week chart
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Obviously, the crypto markets are not reflecting the same euphoria that was seen in 2017, and that is perfectly normal. The formation of a bullish cycle takes a substantial amount of time before a climax can occur.
Regardless, total market capitalization was rejected at the $380 billion resistance level. A new test of the $255 to $280 billion areas is a very likely scenario, which would lead to a confirmation of the 100 and 200 week moving averages as well.
A potential scenario for Bitcoin
BTC/USD 1-day chart
The price of Bitcoin continues to act below the resistance and loses momentum as the volume runs out. Since the trend is downward from $12,400, it’s more than likely that a collapse will occur. That would mean a rejection of the $11,200 – $11,400 area.
However, if the Bitcoin price is able to break this resistance, new highs are on the horizon as the main bullish pivot is broken.
In the case of a reversal, the most likely support levels to be seen are in the $9,500-$9,800 and $8,800-$9,100 regions.
If an additional correction occurs towards these regions, you will probably anticipate that the correction is over. Once this is the case, 2021 could be a very optimistic year for the entire cryptcoin market.