Just so you all know, Bakkt’s Bitcoin futures will have their first weekend pre-open in thirty minutes after this article is published.
While you all, dear readers, likely do not have access to the investment vehicle from the get-go, due to the institutional focus of this product, you should have your fingers on the trading trigger.
After all, volatility in the BTC price is inbound. And Bakkt’s much-ballyhooed launch is likely going to accentuate this. Drastically.
Bitcoin Volatility Tanks
Since early-July, the Bitcoin price has entered into a drawn-out lull, with there being a clearly tightening trade range that has resulted in Bitcoin’s realized volatility falling into a range of 1.2%/day.
Not only is volatility decreasing but so are volumes. Skew pointed out that CME’s BTC futures saw their lowest volumes in four months, implying indirection in this market.
This declining volume in the CME BTC futures market has been echoed over in the spot market.
According to CoinMarketCap, cryptocurrency exchanges in aggregate have processed $51 billion worth of trades over the past 24 hours, which is a far cry from the $120+ billion seen during late-June and early-July of this very year. Sure, the data site is known not to be 100% accurate, but the decline in registered crypto volume accentuates the consolidatory period that Bitcoin is in.
But this lull might be about to come to an abrupt end.
Lull May Come to An End
As reported by NewsBTC, Bitcoin’s volatility index reading on BitMEX has fallen to a zone “where massive price moves are born”, as analyst Chonis put it.
Indeed, per this writer’s analysis of the metric, Bitcoin volatility was last week at a point not seen since two weeks prior to that one fateful day in April, during which Bitcoin experienced a 20% explosion from $4,000 to $5,000. The metric is also as low as it was just days before Bitcoin plunged from the $6,000 cliff to the $3,000 bottom in late-2018.
— BitcoinBig ChonisFlux Trading Group (@BigChonis) September 15, 2019
That’s not all. As analyst Mayne points out, the Bollinger Bands are constricting, moving averages are converging, Bitcoin is nearing the peak of its apex, and Bakkt is hours away from launching.
$10,088.5 is a key level to regain for bulls, looking weak right now I’m not sure another range low test holds.
If we do break $9k I think it’ll be a wick when viewed on the HTF.
BBands constricting, MAs converging, triangle nearing apex and Bakkt, volatility is coming! pic.twitter.com/jKLvXPSq7C
— Mayne (@Tradermayne) September 22, 2019
Long story short, “volatility is coming”.
But honestly, traders are divided over which direction Bitcoin will head in next. However, a statistical study from technical trading legend Thomas Bulkowski says that there is a marginally higher chance that BTC breaks higher instead of lower.
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