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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Allstarcharts Team