Bitcoin’s (BTC) volatility has reached a critical juncture, potentially foreshadowing a significant price movement. The cryptocurrency’s volatility has surpassed levels seen during its all-time high in March, sparking optimism among traders that a breakout from its prolonged consolidation phase is imminent.
According to seasoned traders, Bitcoin must successfully hold above $61,000 and retest the $62,000 level to initiate a rally. This crucial resistance level hasn’t been breached since August 9th. Daan Crypto Trades, a pseudonymous crypto trader, noted that the resurgence in volatility is a necessary precursor to a decisive move, either up or down.
The Bitcoin Historical Volatility chart, which tracks the cryptocurrency’s price fluctuations over time, recently reached 3.42%. This surpasses the 3.00% volatility level recorded on March 13th, when Bitcoin attained its all-time high of $73,679. While volatility itself isn’t inherently bullish, it indicates that Bitcoin’s price could experience substantial swings outside of its current trading range.
However, traders caution that increased volatility can also lead to price declines. Pseudonymous crypto trader TheoTrader warns that there’s a high probability of a market downturn in September based on historical data.
Since the Bitcoin halving in April 2024, the cryptocurrency’s price has been confined within a trading range between $49,842 and $72,000. A surge in volatility can attract more traders to the market, potentially increasing liquidity and creating opportunities for profit-seeking.
Also Read: XRP Surges – Could It Outpace Bitcoin And Ethereum?
Despite the potential risks, future traders appear to be bullish on Bitcoin’s prospects. The put-to-call volume ratio, which measures the demand for sell versus buy options, currently favors bullish sentiment, with 66.18% of options contracts being calls and 33.82% being puts.
As of writing, Bitcoin is trading slightly below $60,000, having made a failed attempt to break through the $62,000 resistance level. Crypto trader Matthew Hyland has identified a potential support level, known as the “neckline,” which Bitcoin is currently testing. If Bitcoin can hold above this level, it could signal a bullish reversal.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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