under 25 – The price of Bitcoin (BTC) is approaching $19,000, at the start of a week that could see the markets bathe strongly in the red, the macroeconomic context helping.
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After the dead calm, major volatilities for the price of Bitcoin
Bitcoin price drops as low as $19,118 on Bitfinex today, October 10, 2022. Cryptocurrency is trading at $19,239 at the time of writing this article. Its price is currently recording a daily loss of 1.19%.
Bitcoin closed the previous week with a doji, almost at the same closing level of last September. The last three weekly candlesticks show the absence of volatility on the markets, a flat calm which illustrates quite well the uncertainty which currently reigns there.
However, the founder of trading firm Eight, Michaël van de Poppe, foresees “ a very big move for the price of cryptocurrency in the very short term, referring to the value of bitcoin’s historical volatility index (BVOL), which has fallen below 25.
Markets currently have “a guaranteed recipe for massive volatility.” In the past, when the value of BVOL fell below 25, markets were treated to a crash at $3,000 in 2018, an upside breakout of $4,000 followed by an ascent to 14,000. $ in 2019, and a breakout of $10,000 in 2020, an event that marked the start of the 2021 bull run.
The macro context for a fall to the bottom of this cycle
Despite these highly volatile forecasts, Michaël van de Poppe believes that the markets will stay most likely “unchanged” until the publication of macroeconomic data this Wednesday and Thursday. The figures on the Consumer Price Index in the United States for the month of September will be revealed on October 13th.
Given the current macroeconomic context, the markets are therefore likely to be shaken this week, with volatility which could play a much greater role in favor of bears than bulls. If the swings in the red are large, will the $19,000 be put to the test yet again?
The strongest bearish hypothesis would be that Bitcoin finally dips to its bottom for this cycle. On-chain data published by Glassnode shows that previous lows in the price of Bitcoin were reached when the 7-day moving average of the percentage of supply at profit was between 41% and 47%. However, the lowest rates for this cycle are between 50% and 52%.
Given all this data, the price of Bitcoin is therefore not immune to another bear run, which could bring it back to levels below June lows of this year.
Have the bulls left their last strength in the previous $20,000 battle, and should markets now expect an imminent drop in Bitcoin price to $16,000 and then possibly $12,000?
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