Bitcoin Price on the Verge of Falling Due to Low Volatility
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Bitcoin price traded last week sideways between $ 9,400 and $ 9,100 on the Bitxmi cryptocurrency exchange
Neither bulls nor bears have been able to see any significant breakout, even though Bitcoin is technically within a daily uptrend.
The first cryptocurrency and the entire digital asset market are known for their extreme volatility. However, the stock market has been much more volatile in the past few months. Stocks like Tesla and a few others have outperformed bitcoins in terms of profit and volatility.
However, there is an indicator that shows that bitcoin is pretty close to a huge jump in volatility. According to Coinmetrics, the volatility of the daily yield (30 days) has dropped to a low not seen since March 2019. It is also the 5th lowest bitcoin volatility in 60 days since its inception.
The dominance of volume indicates that large price movements are very close
According to Josh Olshevich, a trader at Techemy Capital, this indicator can be used to understand exactly when Bitcoin will approach massive price movement during periods of low volatility. Analyzing blockchain metrics can be extremely useful in the short and long term. These metrics may be accurate indicators of the future, but they are difficult to capture.
Bitcoin Price Analysis Tools
Not everyone can do blockchain analysis without tools. Fortunately, there are many sites out there that offer all kinds of metrics, some of them even free. While this data can be really useful, it is important to note that in most cases it usually does not have a direct impact on Bitcoin or any other asset.
Bitcoin trading volume is one of the most important metrics as it shows if the last steps were taken by a few large investors or a group of traders. A bull breakout without a lot of trading volume would not be impressive because it could have been due to a big whale buying a lot of bitcoins at the same time.
The liquidity problem exists even for Bitcoin. The daily trading volume in the cryptocurrency market is negligible compared to other markets. For example, today there are about $ 56 billion recorded, while the Forex market is about $ 6.6 trillion.
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