Bitcoin – Low Volatility May Be Bad for Traders, But the SEC Might Like It

Bob Mason
Updated: Jul 14, 2022, 13:42 GMT+00:00

Bitcoin in the red for the week and for the morning, as the bulls continue to struggle at $6,600. A lat Bitcoin weekend rally couldn't be timelier.


Bitcoin slipped by 0.67% on Saturday, reversing most of Friday’s 0.74% gain, to end the day at $6,595.1.

The reversal took Bitcoin into negative territory for the current week, Bitcoin down 0.4% to the end of Saturday, in yet another sequence of gains and losses that has left Bitcoin in its extended, low volatility rut.

A start of a day intraday high $6,648.2 saw Bitcoin fall short fall short of the first major resistance level at $6,752.07 and the 38.2% FIB Retracement Level of $6,757, with a broad based market reversal in the late morning seeing Bitcoin pullback to sub-$6,600 levels and an intraday low $6,563.7 before recovering through the afternoon.

Attempts at breaking back through to $6,600 were faced with plenty of resistance, with the Bitcoin bulls unable to hold onto $6,600 levels by the day’s end, in spite of a number of moves through the new line in the sand over the course of the 2nd half of the day.

While the low volatility environment will be an unwanted development for the day traders who have enjoyed sizeable intraday swings, it will likely be considered a positive development by both governments and regulators and it couldn’t be timelier, with the SEC’s 26th October deadline for the review of the 9 Bitcoin ETF applications that had previously been declined.

The volatility would have been one concern for the SEC, while price manipulation and fraudulent activity remain the key concerns. The low volatility is also a statement that price manipulation has perhaps abated. Anomolies occur and will likely continue, the recent short sell ahead of the Goldman Sachs announcement to hit pause on its cryptocurrency trading desk still a lingering reminder of Bitcoin’s somewhat shady past.

After wild swings and rollercoaster rides, Bitcoin looks to have settled into a long-term relationship with its investors, who are not speculating their days away and appear to be in it for the long haul.

What comes next remains in the hands of governments and regulators, in spite of Satoshi’s dream of decentralisation and a break from the mainstream, but should the environment remain as it does today, Bitcoin and the broader market could soon begin to find its much needed divergence, performances driven by innovation and product differentiation, which would then begin to spell the beginnings of a is already being labelled a maturing market.

Interestingly, as the 10th anniversary of the Global Financial Market stock market crash of 29th September 2008 passed with little fanfare, the Dow Jones Industrial Average (“Dow”) 777.68 point slide the largest intraday fall until this year’s ‘Bitcoinesq’ moves back in February, it wasn’t the size of the fall that was poignant, but the influence it had on Satoshi Nakamoto, as Bitcoin approaches its 10th anniversary.

For the Bitcoin traders, longevity is the name of the game. If Bitcoin can enjoy the Dow’s lengthy life, the Bitcoin billionaires will likely be joined by many others. All you need to do is to consider the Dow’s lowly 6,594.44 in March 2009 and this month’s record high $26,828.39 and that’s not even taking a look at the Dow into its 10th year of existence… At around the Dow’s 10th anniversary the Dow was struggling amidst the Panic of 1896, where the Dow hit its all-time low 28.48.

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Back to the present, Bitcoin was down 0.14% to $6,586.1 at the time of writing, with Bitcoin moving back through to $6,600 levels with a morning high $6,605.8 before pulling back to a morning low $6,582.9, the early moves leaving the day’s major support and resistance levels left untested.

For the day ahead, a move back through to $6,600 levels would be needed to support a run at the first major resistance level at $6,640.97 and, while we would expect Bitcoin to continue to face plenty of resistance at $6,600, a break through the first major resistance level would likely to lead to a run at the second major resistance level at $6,686.83 late in the day.

Failure to move back through to $6,600 levels could see Bitcoin call on support at the first major support level at $6,556.47, which should be enough for Bitcoin to avoid more material losses, barring negative news hitting the wires.

BTC/USD 07/10/2018 Daily Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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