Bitcoin (BTC) waited for cues at the October 24 Wall Street open as expectations of a breakthrough ran high.
Volatility seems to be closing in. But, traders might have to wait until the end of the year in case history is to repeat itself, as mentioned by one analyst.
Hang Seng Dropped the Most Since 2008
Data acquired from TradingView tracked a mundane trading day for Bitcoin after it hit weekly highs of $19,700 overnight.
Despite what one analyst called “way worse than expected” manufacturing data from the US, Bitcoin suffered significantly from a dropping trajectory on the day.
This pushed the on-chain analytics resource Material Indicators to suspect that resistance would remain firmly in place.
While summarizing the latest 24 hours’ price action according to its proprietary trading indicators, it said:
“Sunday BTC failed all attempts to reclaim the 2017 Top. The change in the trajectory of Trend Precognition’s A1 Slope Line after the D and W close indicates a loss of momentum. Price is currently pinned between the 50-Day MA and the trend line awaiting the TradFi open.”
In the meantime, the analyst said that traders should put the sell levels to beat at $19,600 and $20,700. He added that the US dollar and United States bond yields were now “showing some slight weakness.”
A popular trading account Game of Trades continued:
“Upwards momentum is fading on bond yields. When this last happened, the markets went on a big run.”
It was nevertheless macro markets offering clear signs of volatility to come on the day, particularly in Asia, where the Hong Kong Hang Seng saw its largest daily plunge since the Lehman Brothers implosion in 2008.
Game of Trades also considered the S&P 500 as a possible source of a ‘massive move’ with volatility increasing considerably.
‘Big Expansive Move’ Months Away For Bitcoin
For Bitcoin, volatility might be a long time coming, as a classic indicator delivered signals seen only a few times before.
Buy Bitcoin NowAs previously noted by the co-founder of trading suite DecenTrader, Filbfilb, Bitcoin’s Bollinger Bands continue to contract on weekly timeframes, reaching some rare levels. He told Twitter followers on the day:
“The outcome of each example is obviously a big expansive move. The funny part is that in each of the examples, BTC spent 6-8 weeks tightening further from the width level we are now at, before a big expansive move, so I’m afraid there’s a good chance this thing winds up further.”
Whether up or down, Bitcoin’s current increasing correlation with gold was something to consider, Charles Edwards, founder of asset manager firm Capriole, added. He declared together with a comparative chart of previous such periods:
“Bitcoin bottoms often align with a high correlation to Gold. We have that today. It is much better when Bitcoin is correlated to Gold. Unshackled.”
