Bitcoin moved $1,000 on the weekend before falling lower than where it started the day. And now it is back around $9,300, barely in the green with $844 million as ‘real’ trading volume.
So, nothing happened really for now, and the world's leading cryptocurrency continues to range. The dominance of the digital asset has also been on a downward trend since early May. Down from nearly 70% to 63.50%. This decline has been bullish for altcoins, which have been rallying.
— IncomeSharks (@IncomeSharks) July 12, 2020
Major Price Action
As we reported, bitcoin volatility has reached extremely low levels. According to Skew, the one month realized volatility of bitcoin fell below that of the S&P 500 briefly in July. Bitcoin’s realized volatility has been on a constant decline since early April 2020.
bbands havent been this tight since Nov 2018 pic.twitter.com/VGBrK2kMff
— Josh Olszewicz (@CarpeNoctom) July 13, 2020
ERC20 token Bitcoin Volatility Token (BVL) on FTX that attempts to track the implied volatility of crypto markets have also fallen hard.
this is insane lol pic.twitter.com/cKafsGJhLF
— moon (@MoonOverlord) July 12, 2020
Bitcoin Historical Volatility (HV) meanwhile is nearing 40, and such low levels have historically led to major price action between 30% to 60% movement in either direction, shared trader Josh Rager.
At the current price, a 30% move out the upside would take us above $12,000, and a downside move back to $6,500 level. So, “put your seatbelt on” because bitcoin “might move fast when it does.”
The trader says he is taking it to level-by-level because eventually, the digital asset would hit $12,000, and as for the downside, $7,200 is a substantial area for support.
Meanwhile, Buy Signal is Confirmed
The good thing is that the bitcoin hash ribbon buy signal was confirmed yesterday after bitcoin’s price closed above the daily close of $9,230.
“Bitcoin Hash Ribbons “Buy” signal just confirmed. The post-Halving signal is particularly special. It will probably be a very long time until the next occurs… and so the great bull run begins,” noted Charles Edwards of digital asset management firm Capriole.
— Cole Garner (@ColeGarnerBTC) July 13, 2020
Edwards uses bitcoin’s hash rate to find significant price bottoms based on miner capitulation. So, when the ribbons — the green and blue simple moving average lines of bitcoin’s difficulty and hash rate cross each other, miners are capitulating.
“A simple 1- and 2-month simple moving average of Bitcoin’s Hash Rate can be used to identify market bottoms, miner capitulation, and — even better — great times to buy Bitcoin.”
So, when the 1-month SMA of hash rate crosses over the 2-month SMA of hash rate, the worst of the miner capitulation over and the recovery has begun and buying at these points of time has historically yielded “incredible results.”
Just last week, the bitcoin hash rate made a new all-time high after the halving crash, and difficulty is just 4.6% off of its peak while the price has been stuck in a rut.