Why Bitcoin May Make A Powerful Move Soon

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After an explosive 2017, Bitcoin and other cryptocurrencies have been going nowhere fast in 2018. Bitcoin’s volatility has fallen signficantly as it squeezes to a fine point in what appears to be a descending triangle pattern. Ironically, in the financial markets, unusually low volatility often occurs before powerful, volatile moves – the “calm before the storm,” so to speak. When Bitcoin finally breaks out of this pattern in a convincing manner, a significant move is likely to occur.

According to the chart below, Bitcoin’s descending triangle has been forming since February/March of this year. $6,000 is the key support level to watch. 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. Also, beware of the risk of a head-fake move in which Bitcoin initially breaks out in one direction, only to head in the opposite direction while making a more sustained move.

Daily Bitcoin ChartFinviz.com

The weekly Bitcoin chart shows this descending triangle pattern a bit better:

Weekly Bitcoin ChartFinviz.com

Bitcoin volatility is at unusually low levels according to Bollinger BandWidth, which further confirms that a major move is likely to occur soon:

Volatility ahead?StockCharts.com

I’m watching for a convincing breakout or breakdown from this descending triangle pattern with strong volume for further confirmation.

We at Clarity Financial LLC, a registered investment advisory firm, specialize in preserving and growing investor wealth in times like these. If you are concerned about your financial future, click here to ask me a question and find out more.

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