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Some analysts think that the price volatility that has been plaguing bitcoin over the past few months is about to get a whole lot crazier.
The Bitcoin Volatility Is About to Get Bigger
In mid-April of this year, bitcoin – the world’s number one digital currency by market cap – hit a new all-time high of approximately $64,000 per unit. Everyone thought that the currency was untouchable and that things were likely to keep heading north. Unfortunately, this has not been the case. Bitcoin is now stuck dealing with a series of heavy losses – losses that have brought its value and price down to about half what they were three months ago.
And according to many analysts, we are not out of the woods yet. In fact, the price volatility is about to become much stronger. This could be a good thing in that volatility can move in either direction. BTC could find itself falling further, or things could improve heavily over the next couple of weeks. Either way, financial experts are quite certain that interest in bitcoin remains high, and thus the currency could wind up making its mark on the financial industry all over again.
Oliver van Landsberg-Sadie – the CEO of payments firm BCB Group – explained in a recent interview:
All the on-chain analysis suggests we are at the tight end of a slingshot. It is quiet now, but do not mistake that for lack of interest.
Scott Melker – the host of a crypto podcast and an investor – also threw his hat into the ring, explaining in a statement:
Bitcoin price has been consolidating in a tight range between $42K and $30K for over eight weeks, with decreasing volume and volatility. The longer an asset’s price consolidates, the larger the expected expansion when volume and volatility return. We have seen this countless times with bitcoin, so the expectation is that the next move will be explosive. On-chain analysis indicates that supply is being transferred from impatient speculators to bitcoin whales with large wallets, with new wallets selling and old, larger wallets buying. This theoretically indicates that the smart money is accumulating ahead of the next major move to the upside.
Not Everyone Is Feeling Good About the Situation
While sentiment remains popular amongst these two figures, others – such as Jake Wujastyk – the chief market analyst of Trend Spider – explained that he feels things are about to take a nasty turn, with bitcoin falling even further. He stated:
I disagree in the short term. I would argue the tension is currently to the downside as those that are holding bitcoin need to capitulate to reset the price. The anchored VWAP from the COVID lows points to a level of $27K below to watch out for short term. Based on the historical seasonality, we are entering one of the weakest months of the year next month with only a 20 percent win rate for August over the last five years.