Bitcoin price is stuck today, but a narrowing Bollinger Bands indicator suggests that a big move is brewing.
Bitcoin (BTC) has been stuck inside a narrow trading range for weeks, and Aug. 15 is no different.
BTC price was down 0.32% to around $29,300 on the day. However, its overall market trend remained flat with BTC/U bouncing inside the $28,500-30,000 range since July 24, as shown below.
Bitcoin’s price most stable since November 2016
The calm Bitcoin price action coincides with its lowering annualized realized volatility and derivative trading volumes.
The 30-day average of Bitcoin’s one-year annualized realized volatility fell to a seven-year low of 48.51% on Aug. 14, according to Glassnode.
Meanwhile, the 30-day average of Bitcoin volumes in options and futures markets dropped to their lowest levels since January 2023 — to about $487.37 million and $16.7 billion, respectively.
Why is BTC price flat?
A flatlining Bitcoin market coupled with lowering volumes represents a short-term bias conflict among traders. In other words, most BTC investors are unsure about the coin’s next direction as they weigh between the market’s various factors.
For instance, rising expectations about a Bitcoin ETF approval in the United States have kept the bears at bay with BTC maintaining the $28,500-support level since July.
On the other hand, concerns that the Federal Reserve could raise interest rates further in their upcoming meetings have increased investors’ U.S. dollar appetite.
The U.S. dollar index (DXY), which tracks the greenback’s weight against a basket of top foreign currencies, has rebounded 3.5% from its local low of 99.5 in July. That coincides with Bitcoin’s pullback from its local top of around $31,800.
As a result, Bitcoin’s flat trend may continue until the next Fed meeting on Sep. 19-20.
Classic indicator suggests major Bitcoin move ahead
From a technical standpoint, Bitcoin is gearing up for a massive breakout or breakdown move in the coming weeks
Related: BTC price won’t hit $100K before 2024 halving — Bitcoin investment exec
One of the latest indicators hinting at a big move brewing is Bitcoin’s Bollinger Bands. Shrinking Bollinger Bands typically precede a strong increase in volatility, which may allow Bitcoin to escape its $28,500-30,000 range. Nevertheless, Bollinger Bands are not trend indicators and cannot predict the direction of BTC’s next breakout.
Market analyst Trader Tardigrade is convinced, however, about a Bitcoin upmove, citing a historical fractal.
Notably, BTC was stuck inside the $300-450 narrow trading range between November 2015 and May 2016. It then broke out, sparking a strong bull run and eventually peaking near $20,000 in December 2017.
Meanwhile, the bears will pin their hopes on a rising wedge pattern that on larger-timeframe charts does hint at a possible reversal toward $15,000 in the coming months.
BTC price may avert such a breakdown, however, if it holds above the 20-day moving average (the middle orange wave of the weekly Bollinger Bands in the chart above) at around $28,650.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
