According to analysis of the 200-week moving average (WMA), Bitcoin is experiencing a period of remarkable stability. The data shows that Bitcoin has entered low volatility territory, a trend that has continued since June 2022, making it the longest period since 2012.
A heatmap tracking changes in the 200-week moving average shows the length of this period of stability, highlighting the difference from previous cycles.
For example, in 2019, Bitcoin barely reached the deep blue zone of low volatility. In 2015, on the other hand, the coin remained in this zone all year round, but did not reach the purple shades.
What makes the current situation even more remarkable is the exceptional length of the period of low volatility. By comparison, 2012 saw a shorter and much more intense period of purple volatility from March to June.
Analysts note that while Bitcoin did not see a significant increase during the 2021 bull market, it did not see sharp declines either, indicating that volatility has decreased on both the positive and negative sides.
The reasons behind this long-term stability are multi-faceted, with some speculating about the role of the now-defunct broker FTX, which sold its clients’ bitcoins to invest in risky bets.
However, the current stability can also be seen in relation to previous Bitcoin cycles, where the cryptocurrency has gone through long periods of consolidation at specific values such as $6,000 and $300.
The big question mark now is whether this stability will lead to a repeat of what happened in previous cycles, or whether something different awaits Bitcoin in the future.
Although Bitcoin has remained around $30,000 for quite some time, analysts and investors are curious to see how this stability will translate in the coming months and whether the market is preparing for a new bullish phase or will remain in a state of low volatility for even longer.
Bitcoin passes the main bullish indicator for the second time in history
A cryptocurrency analyst known by the pseudonym Thescalpingpro highlighted a rare event on Bitcoin’s Moving Average Convergence Divergence (MACD) chart.
He noted that the MACD has just crossed its second bullish line after crossing below the zero line, a phenomenon that has only happened once in Bitcoin’s history, in 2016.
At the time, the same event was followed by a significant bull run that sent Bitcoin’s price soaring the following year.
“A strong bullish MACD cross occurs when it crosses below the zero line. In 2016, the MACD bullishly crossed below the zero line for the first time, triggering a bull run. Currently, in 2023, the MACD has crossed the rally below the zero line for the second time.”the analyst explained.
This lagging indicator has accurately identified the trend change in trends at the highest time frame #Bitcoin
Yes, we are talking about MACD.
A strong MACD Bullish Cross occurs when it crosses below the zero line
In 2016, MACD bullishly crossed below the zero line for the first time. pic.twitter.com/MSJDEur4Vy
— Mags (@thescalpingpro) October 15, 2023
Although Bitcoin has recently fallen to the $27,000 mark, the indicator points to long-term bullish trends. However, the analyst also warned that investors should be prepared for price swings and sideways moves in the short term ahead of a possible recovery.
Despite technical analysis, Bitcoin is also subject to external factors such as regulatory developments and macroeconomic elements. The approval of an exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) could play a major role in the future direction of Bitcoin prices.
Currently, Bitcoin’s technical analysis indicates bearish sentiment, with a ‘sell’ rating and strong guidance from the moving averages. However, oscillators are starting to signal ‘buy’.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
