Kicking Off 2023 With a Bang

Louis Sykes
December 29, 2022

They say never to short a dull market.

It's sure got dull, right?

Bitcoin's volume and volatility have taken a summer holiday, with the biggest cryptocurrency's monthly Bollinger bandwidth contracting to its third-lowest level in the last five years.

We've referenced this chart many times this year, giving us a great heads-up on when to anticipate volatility.

Just take a look at this volatility contraction...

We've been clear in our thinking; the US dollar looks primed for a bounce, and the trend is still unequivocally lower. Having a slight bearish bias to this volatility expansion seems prudent when we weigh the evidence.

But, in either case, these coins will move very quickly when we get a resolution in the near term.

As markets become more coiled and contracted, buyers or sellers are ultimately forced to front up.

So, while prices tend to trend, volatility is in a constant state of mean reversion. Markets digest following highly volatile events and move once they've coiled tightly enough.

Even a dummy can look at the chart and see Bitcoin's gone absolutely nowhere these last few weeks.

It's getting tight.

Get ready for the expansion...

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Thanks for reading, and please let us know if you have any questions!

Allstarcharts Team

 

 

 

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