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Bitcoin Volatility is Low. Good or Bad?

Bitcoin Volatility is Dying Fast; BTC Plunged 50% From $6,500 in Last Free Fall

In the last 72 hours, the #cryptocurrency market has been relatively #stable at $111 billion as the Bitcoin price initiated no major #movement.

Bitcoin has struggled to #break out of key resistance levels or drop below crucial support levels, demonstrating a #stalemate for well over three weeks.

Since January, #Bitcoin has remained in a low range between $3,200 to $4,000, unable to engage in any meaningful short-term price #movement.

BITCOIN #VOLATILITY DROPPING MAY MEAN BAD NEWS

The volatility of #Bitcoin has dropped significantly since mid-January as the #dominant cryptocurrency showed stability in a tight #range in the low region of $3,000.

Luke Martin@VentureCoinist

volatility in free fall. Nearly as low as lowest volatility recorded by this index back in November.

In a relatively short period of time, the price of #BTC dropped by more than 51 percent.

Already, analysts have begun to lower their #forecasts in the short-term performance of BTC.

#Fundstrat, a firm led by Tom Lee, a Wall Street analyst who consistently stated that Bitcoin would reach $25,000 as recently as January 28, set a price target for BTC at $2,270.

Robert Sluymer, a Fundstrat Global Advisors market strategist, said:

“The price #structure for most cryptocurrencies remains weak and appears vulnerable to a pending breakdown to lower lows. Fundstrat’s advance/decline indicator is at risk of breaking to new lows.

A break below the fourth-quarter lows at $3,100 would imply a decline to $2,270, while a move above $4,200 is needed to #signal Bitcoin is beginning to improve.”

Source: Woobull.com

Similarly, highly regarded #cryptocurrency traders such as DonAlt and The Crypto Dog have said that Bitcoin is likely to fall to the low $2,000 region if it fails to recover beyond $4,000 in the #foreseeable future.

But, although the next likely move for BTC is to #demonstrate a lower level of momentum in the upcoming weeks, The #Crypto Dog noted that it is still a risky period to short the asset.

“Shorting [Bitcoin at] 33XX is like shorting 63XX. Maybe the #floor breaks on this go, or maybe you’re going to be wrong 5 times in a row. (Maybe it never breaks) Holding a short from higher up – yeah that’s perfectly #reasonable.”

#Hsaka, a cryptocurrency technical analyst, also suggested that it is difficult to short Bitcoin because it is defending the $3,300 support level with relative #strength.

Hsaka@HsakaTrades

Wouldn’t short this right now.

• Sitting at daily support
• Consolidation (3340 -3480) lows taken.
• Beginning to round off.

If we do pump, interested to see how price reacts to the 3440-3450 zone.

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A problem could occur if #Bitcoin continues to show stability in a low tight range and the price trend of major crypto #assets stagnates.

Previously, Mark #Dow, a trader who shorted Bitcoin from its all-time high, emphasized that if BTC does not recover to $6,000 swiftly, it could spell trouble for the #asset in the short-term.

“Still a beautiful #chart. If bitcoin can’t bounce to at least $5k – $6k soon, it’s a really bad sign for the #cyberbulls. And if it breaks down thru the yellow line at any point, even the HODLers need to GTFO,” Dow said.

Hence, even if #BTC does recover to $4,000, it is not in the all-clear to declare a proper bottom and enter a consolidation period.

CRYPTO MARKETS NEED SOME #VOLATILITY

A handful of tokens in the likes of 0x, ICON, #Aelf, and #Chainlink have shown decent gains against both Bitcoin and the U.S. dollar in the past several days.

Binance Coin, for instance, which recently became the 10th most valuable #cryptocurrency in the global market, increased by 25 percent against the USD from $6.25 to $7.84 in the last seven days.

Due to the bear #market, cryptocurrencies have started to show some independent #movements, which could be considered a positive element in the long-term growth of the #sector.

However, it may also lead many crypto #assets to fall by large #margins against the USD while a handful defend key support levels, leading to a short-term #bloodbath.

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