Bitcoin Likely to Hold in a Tight Range

One measurement of bitcoin’s volatility has declined 76% this year. Veteran trader Peter Brandt told CoinDesk TV that bitcoin investors are “just tired.”

AccessTimeIconOct 24, 2022 at 8:48 p.m. UTC
Updated Oct 24, 2022 at 9:04 p.m. UTC

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

Veteran trader Peter Brandt told CoinDesk TV on Friday that bitcoin is likely to remain in a tight range for a while, and could even plunge to $13,000 support before rallying to new highs.

Finding a counter-argument to Brandt’s analysis is difficult. Bitcoin has been trading in a narrow range, and a catalyst to send the largest cryptocurrency by market capitalization higher has yet to emerge. Volatility for the largest cryptocurrency by market cap has dissipated substantially.

Bitcoin’s Average True Range (ATR), a measurement of overall price volatility, has declined 76% year to date, and sits at levels last seen in November 2020.

The price of BTC have declined 60% over the identical time frame, highlighting the slow, tedious grind lower for BTC.

BTC has exhibited far less volatility than the S&P 500 (SPX) and Nasdaq Composite, whose ATRs by comparison have increased 64% and 19% year to date, respectively.

BTC momentum remains decidedly neutral as its RSI (Relative Strength Index) sits at 48.

BTC also appears to be trading right along an area of support, which will vary depending on your method of calculation.

Visually, BTC support appears to have formed around $18,900. Looking at price points, and taking volume at those prices into account implies a slightly higher support level at around $19,300.

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(TradingView)

Brandt identified support levels close to $18,000, but would not be surprised if BTC traded past $17,000 to as low as $13,000 in a “final panic.”

A 32% decline from current prices, would likely stem from a significant negative catalyst. Still, investors would be prudent to consider all options, particularly as we’ve declined by twice that in 10 months.

A look at BTC options open interest by strike price also implies support at $18,000 given the accumulation of call options at the $18,000 strike price. A similar level of call options exists at the $18,500 strike price, while the number of put options begins to exceed calls at $18,750.

While BTC may not intrigue investors looking for short-term gains, its low volatility and limited price action will be attractive for others with long-range goals.

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Bitcoin open interest by strike price (Glassnode)

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Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

CoinDesk - Unknown

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX