Bitcoin may soon get out of the range of $ 30,000 – 40,000, which has lasted for seven weeks. This is evidenced by the Bollinger Bands indicator, which reflects the cyclical nature of the volatility of the cryptocurrency market.
Bandwidth is calculated as the spread between the lines divided by the 20-day average of the cryptocurrency price. Recently, the figure fell to its lowest level in two and a half months at 0.15. Upon reaching similar values in December and April, the cryptocurrency experienced periods of increased volatility. Bitcoin fell from $ 60,000 to $ 48,000 in mid-April, and made a bullish breakout in December after consolidating below $ 20,000 for several weeks. A similar situation was observed in the 2017 cycle.
Thus, if you focus on historical data, it is impossible to identify a clear pattern that would suggest in which direction the breakthrough will be directed.
“We expect buyers to enter above the 50-day moving average of around $ 36,000,” Fairlead Strategies managing partner Katie Stockton said on Monday. “A break of this line would indicate a test of the $ 44,000 – 45,000 resistance.”
At the same time, Stockton admitted that if the downtrend resumes, the fall may not stop at $ 30,000, but she called this option less likely.
Analyst Michael van de Popp agrees that Bitcoin must make a clear break of the $ 35,500 mark to validate the bullish trend. He names the $ 39,000, $ 42,000 and $ 50,000 levels as his next targets.
“What do I expect from the market as a whole? I think we have reached a minimum and will continue to move up. In the coming months, until bitcoin returns to historic highs, altcoins will significantly outperform it, ”he adds.
Analyst Damanic Dantes points out that the Relative Strength Index (RSI) on the daily chart is approaching the prebought level – this may prompt traders to take short-term profits. The mid-term outlook has improved, but the $ 40,000 level remains important resistance, he adds.