KEY POINTS

  • Bitcoin Historical Volatility (HV) drops to 40, suggesting a price move is imminent soon
  • An analyst said Bitcoin could go to $12,600 or $6,500 in the short-term
  • According to Bloomberg, decreased volatility is usually a sign of Bitcoin maturing into a proper asset class

Based on historical data, Bitcoin’s days within the $9,000 range might soon be over as massive volatility is expected in the near-term. Analysts predict a 30% movement, which could shoot Bitcoin upward to $12,000 or down to $6,500.

According to trader and analyst Josh Rager, what Bitcoin is currently experiencing is normally followed by movements 30% to 60% in size. He based it on the indicator called Bitcoin Historical Volatility (HV.) In the graph that Rager has shared, every time HV drops to 40, price action usually follows.

For example, Bitcoin’s historical volatility dropped below 40 one week before BTC touched $10,500, and stayed below 40 one week before the March 12 crash. This means BTC’s price moved by 60% after HV reached 40.

As Bitcoin traded sideways in the $9,000-$9,300 range in the past two weeks, the world’s first cryptocurrency experienced renewed volatility this Sunday, reaching $9,350 on Coinbase. The move was met with a swift rejection, pulling back BTC to $9,170 in 25 minutes. 

In March 2019, Bitcoin crossed HV 40 one week before it surged from $3,900 to $5,222. What followed was a bull run that peaked at near $14,000 in June 2019. 

Bitcoin traded sideways between $9,350 and $9,160 early-morning Sunday, and this volatility has hurt both long and short-sellers, as they lost $3.4 million and $8.3 million through liquidations on derivatives exchange Bitmex.

On the 1-day chart, the immediate resistance rests at $9,300 and BTC’s current price is near that level. Any move downward will meet the immediate support at $9,000, a psychological resistance. If it breaks, expect Bitcoin to visit $8,800 in the short term. 

On the upside, a break past $9,300 will be followed with resistances at $9,450 and $9,600. More resistances are on the way for Bitcoin before it could get back to visiting $10,000 levels. 

According to Bloomberg’s latest Crypto Market Report, decreased volatility is a sign of BTC maturing to be an asset class. But if Bitcoin is poised to reach $20,000, as the publication said in June, before 2020 ends, analysts are expecting more volatility in the coming months.

Gold-colored Bitcoin coin on ground Gold-colored Bitcoin coin on ground Photo: André François McKenzie on Unsplash