Bitcoin has been trading in the relatively narrow range between $6,300 and $6,400 recently. However, investors must not get used to such relative stability as it could be setting the stage for a powerful move up ahead warns an analyst.
The Calm Before the Storm
Everyone knows how volatile the price of Bitcoin can be. Since the crypto traded at $19,537.30 on December 18, 2017, it has been jumping up and down unpredictably during the following months and has even reached a low of $5,902.13 on July 30, 2018, based on data from CoinMarketCap.
This makes its recent price action a bit surprising to those who have been following the coin. In recent weeks, Bitcoin has been trading in a relatively narrow range between $6,300 and $6,400, which is probably the most stable price movement for the crypto since December – the price chart is practically a flat line lately.
But according to registered investment advisor Jesse Colombo, this period of relative stability is akin to “the calm before the storm,” according to a report by Express. Colombo warned that based on historical data from financial markets, a period of low volatility usually precedes a powerful and volatile market movement.
Jesse Colombo said:
“When Bitcoin finally breaks out of this pattern in a convincing manner, a significant move is likely to occur… Bitcoin volatility is at unusually low levels according to Bollinger BandWidth, which further confirms that a major move is likely to occur soon.”
Market Movement Direction
However, even Jesse Colombo is unsure as to what direction this powerful market would move in. The investment advisor is leaning towards a downward trajectory but urged investors to be prepared for the possibility of an upward momentum as well, saying:
“Descending triangles are bearish patterns, so there is a higher probability of a breakdown from here, but it is important to be open to the idea of an upside breakout as well.”