Related Topics
Currencies , Investing , Trading

Why Bitcoin’s “Wild Swings” May Soon Resume

“Periods of low volatility precede periods of high volatility”

by Bob Stokes
Updated: July 15, 2021

As you probably know, bitcoin investors have been taken on a wild rollercoaster ride during the past several months.

However, starting around the last week of May, bitcoin's trading range tightened up considerably (between $30,000 and $40,000).

Indeed, since roughly the last half of June, the trading range narrowed even more (approximately $28,000 to $35,000).

As a July 12 CNBC headline says:

Cryptocurrency trading volume plunges as interest wanes following bitcoin price drop

The daily maximum volume in June was down more than 42% from the peak trading volume in May, according to the report.

However, bitcoin speculators should keep in mind this quote from one of our classic Global Market Perspective's:

Periods of low volatility precede periods of high volatility.

That reference was to the stock market, yet the same principle applies to other widely traded risk-assets, like cryptocurrencies.

So, it would not be surprising if volatility returns to bitcoin's price action sooner rather than later.

The questions, of course, are: Will the first swing be up? Down? And what comes after?

As you may know, Elliott wave analysis allows you to "peak" around more than one corner at a time as the markets are moving along their patterned paths. Another factor we keep our eye on is investor sentiment, which right now is bearish toward bitcoin. Our head crypto analyst Tony Carrion discusses that in the July Global Market Perspective as he points out that bitcoin speculators suffered $3.45 billion in realized losses from the selloff that started at the April peak near $65,000 through the $28,000 low in June.

In our July Global Market Perspective, Tony also goes into detail about bitcoin's Elliott wave price pattern, to show you which way bitcoin prices are likely to jump first when volatility returns.

That's where the "rubber meets the road."

Get our Elliott wave analysis of bitcoin in our current Global Market Perspective. Just follow the link below for instant access.

Global Stock Markets Never Need a "Reason" to Make Sudden, Big Moves

The history is clear: Global stock markets have indeed made big price moves on days when there was no big news.

What's more, trading days often move contrary to the headlines: In other words, stock prices rise after bad news, and fall when news is good.

Ever wonder why?

Put simply: News and events do not drive global stock market trends. Yes, the market might have a brief emotional reaction, but the main trend in all major world indexes simply picks up where it left off.

You see, investor psychology is the real driver behind stock market trends -- Elliott waves directly reflect this psychology.

Learn what our experienced global Elliott wave experts are saying about the next big moves in stock markets around the world, so you can prepare.

Follow the link below to get the insights that you need.

The Opportunity-Finding Power of Elliott Waves: So Nice, We Had to Show You Twice

See what our subscribers saw before the big rally in cocoa, when the opportunity window was open.

Explosive Rise in Stock Market Volatility! Why It May Be Ahead

Options which expire within 24 hours have increased in popularity. The lack of time premium makes them highly sensitive to price changes. Learn how this relates to the CBOE Volatility Index (Wall Street's fear gauge).

Why Have Society's Values Shifted Over the Past 25 Years?

When you look at society today, there's no dispute that social values have shifted. But why? Some say demographics. Others blame politics. Yet others say it's the influence of the news and social media. Let's take a look at an indicator that tells a different story about why our values differ starkly from a generation ago.