Crypto Markets Analysis: Bitcoin Finishes Roller-Coaster Week Near Where It Started

An unusually high number of altcoins set off Bollinger Bands technical signals.

AccessTimeIconDec 16, 2022 at 7:59 p.m. UTC
Updated Dec 16, 2022 at 9:25 p.m. UTC
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Anyone who ignored bitcoin over the last seven days would think that not much occurred, if looking at total price movement. Those paying attention might still be dizzy from the roller-coaster ride.

Optimism early in the week reversed, with bitcoin’s price settling in just below $17,000. On a relative basis, BTC’s seven-day performance against the U.S. dollar was third among the top 20 cryptocurrencies by market capitalization.

Ether finished in the middle of the pack, declining 5% over the last seven days. TONCOIN led the way, increasing 30%

Weekly Performance 12/16/22 (Messari)
Weekly Performance 12/16/22 (Messari)

BTC’s chart doesn’t offer much by way of short-term optimism. Its Relative Strength Index (RSI) has fallen near 40, implying that BTC momentum is essentially neutral at the moment.

The Volume Profile Visible Range tool shows significant past trading activity and price agreement between $16,500 and $17,000. The combination of these factors sets the framework for BTC to trade flat, in lieu of a new catalyst.

Bitcoin 12/16/22 (TradingView)
Bitcoin 12/16/22 (TradingView)

CoinDesk Market Index sector performance

Month-to-date performance among CMI sectors shows that the CoinDesk Currency Index (CCY) has led the way – although in this case “leading the way” really just amounts to decreasing by the least. The CoinDesk Computing Index (CPU) declined the most, down close to 14% month to date.

CoinDesk Market Index (CoinDesk)
CoinDesk Market Index (CoinDesk)

Crypto screen of the say

Over 30 altcoins breached the lower band of their Bollinger Bands Friday, in unusually coordinated fashion.

Bollinger Bands are a technical indicator that tracks an asset’s 20-day moving average, and calculates price bands that are two standard deviations above and below that average. Statistically, prices stay within two standard deviations of its average approximately 95% of the time, so a move beyond either band is important to monitor.

In trending markets, a move beyond an upper or lower band can signal a sharp price move in that direction. In markets similar in nature to the flattish one we’re currently experiencing, it can signal that prices have moved too far in one direction, and are poised to revert to the average.

The sharp move down may provide a compelling entry point.

Bollinger Band Screen 12/16/22 (Optuma)
Bollinger Band Screen 12/16/22 (Optuma)

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Glenn Williams

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


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