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Bitcoin (BTC) is a time bomb: August 15, 2023 analysis

Wed 16 Aug 2023 ▪ 4 min of reading ▪ by Family Trading Partnership
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After marking a new annual ATH in mid-July, the bitcoin price came to stabilize around the $29-30K mark. Since then, fluctuations on the leading cryptocurrency have stagnated, suggesting some movement ahead on the market.

Bitcoin logo framed by a magnifying glass with a full-color graphic in the background, along with a bull and a white bear.

BTC situation

In our July 27, 2023 Bitcoin analysis, we mentioned two possible scenarios. So far, neither has happened. Indeed, since that date, bitcoin has been platonic. It has traded and continues to trade around $29K and $30K.

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today a trainer at Family Trading, a community of thousands of own-account traders active since 2017. Here you’ll find Lives, educational content and mutual support around the financial markets in a warm, professional atmosphere.

Lack of players? Market indecision? Bullish and bearish forces at the same level? The one point on which everyone agrees is that volatility on the crypto market is clearly on the decline. This can be seen in various indicators, such as the ATR and the Bollinger Bands.

BTC/USD weekly chart
BTC/USD weekly chart

Perhaps the most significant indicator is bitcoin’s Historical Volatility index.

Bitcoin Historical Volatility Index

The Bitcoin Historical Volatility Index (BVOL) is a measure of the past volatility of the bitcoin price. It is based on the analysis of Bitcoin’s price variation over a specific period, usually days or weeks.

Bitcoin Historical Volatility Index 7-day chart (in blue) coupled with BTC/USD weekly chart (in orange)
Bitcoin Historical Volatility Index 7-day chart (in blue) coupled with BTC/USD weekly chart (in orange)

Paradoxically, this low volatility can be a warning of the latter’s recovery. Indeed, in the past, a BVOL7D below the $3 threshold has repeatedly triggered a rebound in the latter and, at the same time, warned of significant movements in bitcoin. There’s every reason to believe that this scenario could play out again in the not-too-distant future.

However, as seen in the July 27, 2023 analysis, there are many diverging factors. This makes it difficult to know where this long-awaited movement might be heading. That’s why we need to pay close attention to the various supports and resistances.

Scenarios for the Bitcoin price

For a bullish scenario, we’d have to consider the reintegration of the $30-32K zone. An upward break of this zone could give us new bullish targets, starting with the $35K or even $38K zone.

For a bearish scenario, we’d first have to imagine a return to $28K. Breaking this level could give us the $27K support as our next objective. Finally, if the latter doesn’t hold, we’ll have to hope that the $25K support holds out.

Graphique du BTC/USD en période journalière
BTC/USD daily chart

Conclusion

From a technical point of view, bitcoin is still in a decisive phase. Indeed, the BTC price remains below solid resistance. However, it is managing to hold above $29K. The next moves are likely to be decisive and potentially significant, given the current volatility threshold. It will be important to keep a close eye on the price’s reaction at the various levels identified, in order to confirm or refute the various hypotheses made. Beware of potential “fake outs” and “market squeezes” on each of these situations. And remember that these scenarios are based solely on technical analysis. Cryptocurrency prices may evolve more or less rapidly, depending on other, more fundamental factors.

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Family Trading

Family Trading est une Communauté de traders a compte propre active depuis 2017 offrant Lives, contenus éducatifs et entraides autour des marchés financiers dont celui des cryptomonnaies avec à ses côtés Elie FT, investisseur et trader de passion sur le marché crypto.

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