Bitcoin continues to stay at the $19,000 mark as the market notes an uncharacteristically low degree of volatility. Emphasis is being laid on BTC’s range-bound price action. Questions are being asked – whether this is a sign of a market bottom or decoupling from equities markets.
Delphi Digital, a research firm, highlighted the Bollinger Band Width Percentile (BBWP) metric. It believes there could be a big move brewing for Bitcoin. It said that historically, BBWP readings above 90 or below 5 have shown major swing points. With the BBWP yet to dip under 5, researchers say readings above 90 or below 5 have previously led to an upside of 204% or a downside of -51% on average. However, it’s too early to conclude that Bitcoin has broken its correlation with equities markets or even reached a market bottom.
Data indicates that long bouts of sideways price action have marked accumulation and distribution phases. Moreover, Glassnode’s Accumulation Trend Score is in the neutral zone. This denotes a state of equilibrium in Bitcoin’s accumulation structure.
At the time of writing this article, Bitcoin was trading at $19,172 and Ethereum at $1,300. The world’s most popular cryptocurrency continues to occupy the lower part of the $19,000 – $21,000 range. Analysts describe this as a sign of ongoing market fears about rising prices and the prospect of a steep recession. This comes as the Federal Open Market Committee (FOMC) releases its minutes and the latest Consumer Price Index (CPI). A move, either way, is expected as the Fed reiterated its commitment to prioritize stanching inflation. The CPI will fall to 8.1% annually. But this is not enough to reverse the central bank’s current monetary hawkishness.
Benoit Bosc, global head of product at GSR Markets, pointed out that BTC’s price had fallen far further than the Nasdaq and S&P this year. It would improve sooner than the indexes as economic conditions rebound. Bosc believes there is a better potential for crypto to decouple.