Why Bitcoin will move away from $30,000

Image by: JOHN TOWNER – Unsplash

Bitcoin price action has been range bound for weeks, resulting in the lowest volatility in years. A recent report points to a possible breakout of the current range, but which side will be positively surprised by the potential spike in volatility?

As of this writing, Bitcoin is trading at $28,950 with sideways movement over the past 24 hours. Over the past seven days, BTC price saw a slight decline, posting a 2% loss. Other tokens in the top 10 by market cap fare worse, with many posting double-digit losses over short periods of time.

BTC price is moving sideways on the daily chart. Source: BTCUSDT trade view

Last time bitcoin price volatility was low

As seen in the chart below, provided in a report by trading arm QCP Capital, annualized volatility for BTC reached critical levels for the first time in over five years. The key figure was last at this level from the end of 2018 to 2019.

Source: QCP Capital

The chart above also shows that volatility oscillated from low to high for the year in a cycle that spanned 2019. Back then, bitcoin and the crypto market were recovering from an ongoing bear market that, like today, left traders and market participants smashed and with almost no appetite for risk.

QCP Capital noted that from 2018 to 2019, the macroeconomic landscape dominated Bitcoin’s price action. Back then, the US Federal Reserve (Fed) hiked interest rates, but the COVID-19 pandemic acting as a catalyst forced them to reverse.

The latter happened from late 2019 to 2020, when the easing of macroeconomic conditions allowed Bitcoin to rally to a new all-time high. Therefore, the trading department is convinced that a catalyst is needed to bring the price action back to life:

The last time trading was compressed this much was during the crypto winter of 2018 and 2019, and it took a change in the macro environment to revive the market.

However, they noted that the break of the current low-volatility environment is not “imminent.” However, the upcoming Bitcoin spot exchange traded fund (ETF) decision in the US could act as a catalyst and take BTC to its next resistance level around $34,000, but patience is still needed.

QCP Capital concluded:

Will there be a sharp rally that takes us to the 34,000 resistance – like the previous three times the support trendline was touched this year? We think it might be a few quiet weeks before we find out.

Cover image from Unsplash, chart from Tradingview

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