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Why Bitcoin May Be On The Verge Of A Powerful Move

Written by Lance Roberts | Oct, 22, 2018

After its powerful surge in late-2017 and stunning plunge in early-2018, Bitcoin’s volatility has died down significantly as it settles into a narrowing range just above its key $6,000 support level. This narrowing pattern appears to be a descending triangle, which has very bearish implications if the cryptocurrency breaks below the key $6,000 support level in a convincing manner with high volume. A decisive break to the upside, however, would increase the probability of further bullish action. Either way, when a market narrows to a fine point like Bitcoin is, it typically indicates that a volatile move is likely ahead upon a final breakout or breakdown.

Daily Bitcoin Chart

The weekly Bitcoin chart puts this descending triangle pattern into perspective a bit better:

Weekly Bitcoin Chart

Bitcoin volatility is at unusually low levels according to Bollinger BandWidth (a volatility indicator), which means that there is a high probability of a strong move soon:

Bitcoin Volatility

I will be watching closely for a breakout or breakdown to confirm this descending triangle pattern.

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2018/10/22
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