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Bitcoin price closed yesterday’s session near zero, despite the start of the Christmas rally in stock and commodity markets. The reason for the lack of growth in BTC was volatility, which dropped below the November levels, frustrating the bulls’ attempt to storm the $ 50,000 level.
The volatility indicator is directly related to the activity of transactions, indirectly measuring the trading volumes, whose highs must accompany any rise in Bitcoin, so that the trend can “bring” quotes to new price levels.
The current extreme lows of volatility actually close the BTC upside, regardless of external positive fundamental events. Lack of volumes will prevent bulls from taking the $ 50,000 level. On the other hand, bears will be able to push Bitcoin quotes to $ 40,000, breaking through the descending triangle line.
Given the moment of Christmas and the absence of a large number of large clients, the situation in cryptocurrencies is capable of repeating the November scenario, marked with a yellow marker on the chart. The bulls will arrange a short-term pump to $ 50 thousand or even $ 55 thousand before the New Year, in order to then go into a protracted downward trend like 2018.
Only hints of positive US legislative initiatives or a weakening of China’s pressure on cryptocurrencies can undo the fall in January 2022.
Despite the implausibility of the second option, it is quite possible due to the prospect of the transition of the world economy to the format of the Metaverse. Blockchain and decentralization may become the new standard of international business relations that the Celestial Empire is unable to ignore.
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