Bitcoin (BTC) continued to exhibit reduced volatility as it approached the weekly close on July 30, sparking excitement among traders who were anticipating a long-term bullish signal. The weekend saw BTC/USD trading within a narrow range of just $150, making it one of the slowest weekends in recent memory.
Throughout the week, Bitcoin remained relatively stable despite various macroeconomic events taking place. This stability led some market participants to believe that a breakdown was imminent. However, as the weekly close approached, there was still no sign of significant volatility returning.
Popular trader Daan Crypto Trades noted that the price action had become increasingly compressed, likening it to the start of 2023. This compression in price often precedes a significant move in either direction. If historical patterns repeat themselves, this could lead to a substantial price movement.
Bitcoin’s Bollinger Bands, which measure volatility, currently resemble the conditions seen at the beginning of the year when the price of BTC surged by 70% in the first quarter. This similarity in market conditions further fueled speculation about the potential for a major move in the near future.
Analysts monitoring the BTC/USD order book on Binance observed a combination of buying pressure from whales and increasing resistance near the $30,000 level. They predicted that the guardrails would remain intact until the weekly and monthly candle closes.
Another exciting development was the potential bullish cross on Bitcoin’s monthly moving average convergence/divergence (MACD) indicator. Market observers pointed out that this bull flag was on the verge of confirmation on the monthly timeframes. If this cross occurs, it could indicate further upside potential for Bitcoin.
However, it’s important to note that the appearance of the cross doesn’t necessarily mean that Bitcoin has already exited its summer correction mode. In the past, a similar monthly MACD cross in late 2015 preceded Bitcoin’s climb to its previous all-time high of $20,000 two years later.
While lower-timeframe MACD crosses can sometimes result in false signals, a weekly MACD cross in August 2021 correctly foreshadowed Bitcoin’s rally to its current all-time highs in November of that year. Traders will be closely watching for confirmation of the monthly MACD cross and its potential impact on Bitcoin’s price trajectory.
It is crucial to exercise caution and conduct thorough research before making any investment or trading decisions. This article is for informational purposes only and does not constitute investment advice or recommendations.