Validating Bitcoin’s Buy Signal
ByteFolio Issue 222;
Bitcoin’s ByteTrend Score has risen to a 2. Recall last week’s important development, where I highlighted Bitcoin’s ultra-low 30-day volatility.
Bitcoin Daily
The thesis is that periods of unusually low volatility don’t last for long and soon lead to a decisive move. That could be up or down, but in Bitcoin’s case, eight out of the nine signals were up. The one highlighted below was the lone downer in 2018.
Bitcoin: Low 30-Day Volatility Signals
Knowing that a move is coming is key, and the tool to trust is ByteTrend. In 2018, the 200-day moving average was falling, and the price soon broke down. A ByteTrend score of 0 came within days.
Bitcoin: Low-Volatility Signal in 2018
The other low-volatility signal, which also had a falling 200-day moving average, came in late 2022, at the tail end of a bear market. The ByteTrend Score rose to a 5 within days and proved to be a spectacular entry point.
Bitcoin: Low-Volatility Signal in 2022
This time, the low-volatility signal was first given on 11 August, just 8 days ago. It was a worrying weekend, but Bitcoin opened on Monday with a bang. What is key from here is a break of the max-min lines (blue up, red down). With the hope that it’s blue, further confirmation will come from a move above the 200-day moving average.
Bitcoin: Low-Volatility Signal Today
If the price can climb to around $70k, this won’t take long, especially since 200 days ago was 1st February. The first touch of $65k occurred on 5th February. That means those higher prices will be flushed out of the 200-day moving average calculation by 23 August, or this Sunday. Any price strength thereafter will soon be reflected with a rising 200-day moving average.
This is important because a rising 200-day moving average brings confidence. It could be that Bitcoin slumps, alongside a deflating stockmarket.
Or maybe, it’s Bitcoin’s time.
