Bitcoin has seen some of the most boring price action it has witnessed in over a year.
After ranging between $9,000 and $10,000 for over two months, the cryptocurrency has now narrowed its trading range to between $9,000 and $9,300, with BTC primarily just hovering around $9,100.
The benchmark digital asset is showing few signs of breaking this trend anytime soon, but one analyst does believe that this could mark the “calm before the storm.”
He claims that this bout of sideways trading is likely to resolve in a massive movement, and notes that he is leaning towards believing that the next move will favor sellers.
Over the past several days, the crypto has remained caught beneath a crucial cloud formation. This indicates that further downside could be imminent in the days and weeks ahead.
Another trader believes that a continued bout of trading beneath its cloud resistance could lead BTC to as low as $7,800.
Bitcoin Extends Rangebound Trading Bout as Technical Outlook Weakens
At the time of writing, Bitcoin is trading down marginally at its current price of $9,060.
This marks only a slight decline from where the cryptocurrency has been trading at over the past few days, as buyers have been ardently guarding against a dip below $9,000.
Although it has yet to post a sustained decline beneath this level, the cryptocurrency’s reactions to its support in the upper-$8,000 region are growing weaker with each visit.
This is likely the result of the dwindling trading volume and could be a grim sign for BTC’s near-term outlook.
Periods of intense sideways trading coupled with declining trading volume don’t tend to last for too long, and they are usually followed by explosive movements.
This next movement may favor sellers, as the cryptocurrency has been trading beneath its 4-hour cloud resistance for an extended period of time.
One analyst spoke about this in a recent tweet, while offering a chart showing that the $7,800 resistance was never re-tested as support – signaling a movement to this level may be imminent.
“4h still below cloud – wake me up when that is over,” he explained.
Image Courtesy of Teddy. Chart via TradingView.
BTC Could Be Witnessing The “Calm Before the Storm”
Another well-respected trader recently mused the possibility that this ongoing bout of sideways trading could be the “calm before the storm” that ultimately results in Bitcoin making a massive movement.
He notes that the low volume and tight trading range are conducive to this possibility.
“IMO BTC is about to run: Friday was the lowest volume, smallest range candle I’ve ever seen. Calm before the storm? Up or down IDK, thinking down more likely… Will manage risk tightly,” he explained.
It is unlikely that this next Bitcoin movement will occur during the weekend, but it could come about as soon as this week.
Featured image from Shutterstock. Chart from TradingView.
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source https://cryptonews.wealthsharingsystems.com/2020/07/why-one-top-bitcoin-trader-believes-now-is-the-calm-before-the-storm/
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