Bitcoin’s price risks deeper losses below $8,000 as the bears seem to be winning a four-day-long tug-of-war with the bulls.
At press time, BTC is changing hands at $7,950 on Bitfinex – down 2 percent in the last 24 hours – having clocked a low of $7,930 earlier today.
The cryptocurrency has been largely restricted to a narrow range of $8,300–$8,050 since late Friday. Consequently, the Bollinger bandwidth – a volatility indicator – dropped today to the lowest level since October, as per the short duration technical chart.
Hence, we could be in for a big move, as a prolonged period of low volatility (range-bound activity) usually makes way for a big move on either side.
Further, the big move (if it does materialize) could happen to the downside as the bull case has weakened following BTC’s failure to capitalize on a descending broadening channel breakout witnessed on Friday.
The above chart shows:
Clearly, the technical chart is aligned in favor of the bears. Further, the decline could be sharp, a key volatility gauge indicates.
The volatility, as represented by the Bollinger bandwidth (gap between the bands) on the 4-hour chart, fell today to its lowest level since October. As stated earlier, an extended period of low volatility is usually followed by a big move, which is seen happening to the downside.
As a result, BTC could suffer a deeper drop below the $8,000 mark.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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