Bitcoin price has been trading sideways for nearly 50 days at the height of its Black Thursday recovery rally. Volatility has dropped to some of the lowest levels ever in the emerging asset class as a result.
However, an unusual event is about to take place that in the past has been associated with some of Bitcoin’s most volatile periods throughout the last several years. Could volatility soon return in a big way?
Post-Halving Bitcoin Price Action Trades Sideways, Consolidating Ahead Of Major Move
Bitcoin and the rest of the cryptocurrency asset class often get a bad rap for the wild price swings and extreme volatility they are associated with.
It’s not uncommon for the asset’s valuations to rise and fall 20 to 30% or more month to month, and even intraday.
Thousand percent gains are often followed by a drawdown of over 80 to 90%.
But as the first-ever cryptocurrency trades sideways post-halving, relative volatility has dwindled to some of the lowest levels ever recorded.
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Compared to major stock indices, Bitcoin is acting more like a stablecoin.
The leading crypto asset by market cap has been trapped within a tightening, $1,000 range. Any attempts to push below $9,000 or above $10,000 are immediately reversed in this ongoing game of BTC supply and demand tug of war.
This general period of calm in the asset class is likely nothing but the ‘calm before the storm.’ One unusual factor may soon cause a break in the relatively stable price action and lack of volatility.
June 18, 2020, kicks off an astrological event referred to as “Mercury in Retrograde.”
What this means is that during this phase, Mercury appears to move backward across the night sky.
All kinds of information has been published related to the dramatic effect this period can have on human emotion and activity.
According to astrology, Mercury in Retrograde specifically impacts communication and technology, and can negatively influence luck and mood, bringing misfortune.
It also has repeatedly shown to spark extreme price volatility in Bitcoin.
Mercury In Retrograde May Bring Return of Cryptocurrency’s Trademark Explosive Volatility
In the chart above, each Mercury Retrograde phase is highlighted in red. Each phase also saw exceptionally powerful moves in the days leading up to and during each occurrence of the astrological activity.
Astrology is the study of the celestial objects and their proposed divine impact on human affairs.
Because these celestial events are said to influence swings in human emotions – and because Bitcoin being a speculative asset is more susceptible to sudden changes in human emotion – powerful volatility can result.
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Even the recent Black Friday market collapse that swept stocks, precious metals, and more, took place during the most recent Mercury in Retrograde.
For those that immediately naysay the astrological association, at the bottom of the chart, Bollinger Band Width also shows an expansion of relative volatility during each of these phases.
There may be no direct correlation, but given the regular recurrence of volatility during each phase, there enough rhyme to give reason to be extra cautious in the days ahead. Especially considering how much the asset has been coiling recently right below extremely powerful resistance.
A breakout, could lead to a surge of FOMO buying as crypto investors prepare for the bull market ahead. Another breakdown after both a lower low and lower high, could result in yet another low and continued downtrend.
Another lower low below $4,000 could threaten to set the first fresh bear market low since late 2018. A low that for now is considered the bottom.