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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.

USDJPY: Two Charts, Same Wave Pattern – and Same Forecast

You may have heard us say Elliott wave chart patterns are fractal -- meaning, smaller patterns make up larger ones. To understand how powerful this can be in forecasting, watch our Currency Pro Service editor walk you through the 2-week and daily charts of the Japanese yen, a big forex market.

Natural Gas: Catching the "Unstoppable" Rally Before it Even Started

Natural gas saw a HUGE rally in the past five months: Most analysts point to "weather." Yet that does not fit the facts. See the natural gas chart and forecasts that tell the real story.


Elon Musk vs. Dogecoin: Who Leads, Who Follows?

For months leading up to its May peak at 73 cents, Elon Musk's tweets about Dogecoin were said to drive its price higher. Since the peak, Dogecoin has fallen 78% -- yet, Elon Musk's tweets haven't stopped! So, was it really one person's tweets that were driving this market higher? Our Crypto Pro Service editor explains -- and gives you a hint as to what's next for the "joke crypto."