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Here's Why You Should Watch Bitcoin Closely This Week

Mon, 07/04/2022 - 12:16
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Arman Shirinyan
Bitcoin's low volatility can sometimes act as sign of upcoming move that no one expects, as usual
Here's Why You Should Watch Bitcoin Closely This Week
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Bitcoin's most recent price performance clearly shows that the first cryptocurrency does not have enough buying or even selling volume behind it, which leads to a lack of volatility on the market. Luckily, extremely low volatility sometimes causes big moves on the market that we are all waiting for.

Bitcoin's volatility is decreasing

Following the massive crypto market crash back in June, most crypto market participants were scared away from trading assets like Bitcoin and immediately closed most of their positions to avoid further losses.

Bitcoin chart
Source: TradingView

The lack of volume on the market is the main reason behind the anemic performance of Bitcoin. Since June 21, Bitcoin has lost a bit less than 5% of its value while gaining around 5% back on June 25, which shows that the first cryptocurrency remains in a state of consolidation and the real buying or selling power is not on the crypto market.

How volatility pushes price up or down

With the lack of volatility, almost any significant outflow or inflow of funds on the market can cause a crash or a strong rally since, with the decreasing volatility, we usually see decreasing liquidity, which is the main tool for controlling stability on the market.

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With the weekly average volatility for Bitcoin staying at around 5%, the market should historically expect a short or mid-term spike in volatility which, unfortunately, could push Bitcoin in both directions. 

At press time, Bitcoin is still consolidating in the $22,000-$18,000 range as both bulls and bears are not sure when to inject funds into the market again. 

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.