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Bitcoin (BTC): Here Are Three Potential Catalysts for Breakout

Wed, 08/09/2023 - 13:40
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Tomiwabold Olajide
Bitcoin (BTC) might be on verge of breaking out
Bitcoin (BTC): Here Are Three Potential Catalysts for Breakout
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Bitcoin neared the $30,000 mark on Wednesday following a two-day rally. BTC was up 1.71% in the last 24 hours to $29,861 at the time of writing, putting it on track for its third straight day of price increases.

Despite this, Bitcoin's price action has been lackluster generally, as the world's largest digital asset has been locked in a period of muted moves.

Bitcoin volatility, which measures how much the digital asset fluctuates, hit an all-time low in the last month as the price stuck around $30,000.

After hitting around $31,000 in July, Bitcoin saw a lull due to a cooling off in the 2023 rebound from last year's collapse. The year-to-date gain is currently 80%, down from 90% through mid-July.

Bitcoin (BTC) Sees Rare Weekly Chart Occurrence, Where Might This Lead?

However, if chart patterns and history are any indication, Bitcoin may be on the verge of breaking out of an abnormally low volatility period.

Here are the potential catalysts:

1. Bitcoin ETF Spot:

Potential drivers for a breakout include, first, a potential spot Bitcoin exchange-traded fund in the United States, which might increase demand.

According to sources, the Securities and Exchange Commission must approve or deny ARK's registration for a Bitcoin ETF by Aug. 13. Other firms, including BlackRock, Bitwise, VanEck and WisdomTree, have also applied for a spot Bitcoin ETF.

Cathie Wood, CEO of Ark Invest, and Mike Novogratz, CEO of Galaxy Digital, are both optimistic that a spot Bitcoin (BTC) exchange-traded fund might be approved soon.

2. Bitcoin traces falling wedge:

Bitcoin has formed a falling wedge, or a narrower price range, similar to a pattern that predicted a June rise. A falling wedge is frequently regarded as bullish by chart analysts. A break of the upper line of the pattern might serve as a trigger for a breakout.
3. Bitcoin flashes rare volatility signal:

After a significant dip, Bitcoin's 30-day historical volatility is nearing the 20 handle. According to Bloomberg, the metric has been 20, or 2% less, than in the last decade.

A drop below 20 followed by a rebound back above is even rarer; it happened seven times in the last 10 years, and Bitcoin rose 16% on average over the next 30 days.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.