Bitcoin could soon see a massive move as volatility continues to tighten, according to a crucial indicator. Investors, however, remain largely divided over what comes next for the cryptocurrency.
Bitcoin Is Prepping For a Massive Move
The width of the Bollinger Bands on Bitcoin’s daily chart is nearing levels not seen since February earlier this year, prior to the drop from $10,000 to $3,700 in the span of four weeks.
The width of the Bollinger Bands, according to the analyst that shared the chart below, is a sign that “something big is happening very soon.”
Bitcoin price chart over the past one and a half years with volatility indicator (Bollinger Band Width). Chart from TradingView.com; shared by Byzantine General (@Byzgeneral on Twitter).
The expectations of an imminent bout of volatility have been reflected by other analysts. One trader, the head of technical analysis at crypto research firm Blockfyre, recently wrote:
“Time based fib extension on $BTC says we get movement in the next week. We have spent 49 days today inside this exact range shown. The move when it comes should be massive. Position accordingly.”
Investors are largely divided over what comes next, but there have been whispers of a decline in the works. The on-chain state of BTC is currently bearish, with the economic throughput of the network decreasing as prices have stalled.
Furthermore, there are a few trend indicators suggesting a retracement is more likely than another leg higher after BTC’s 150% rally from March’s lows.
The Low Volatility Is a Good Thing: Bloomberg Analyst
Although the low volatility isn’t likely to last forever, some have seen it as a positive sign for Bitcoin.
Mike McGlone, a senior commodity analyst at Bloomberg Intelligence, touched on this narrative in a recent report on his outlook on cryptocurrencies.
In the June report, entitled “Bitcoin $10,000 Gaining Support,” McGlone wrote that the continual adoption of the cryptocurrency by institutional players via futures and other markets is “suppressing” volatility, “clearly keeping it tilted toward more appreciation.”
The decreasing levels of volatility are also cementing the idea that Bitcoin is becoming a mainstream asset class, the analyst wrote: