Bitcoin´s 3D chart is flashing a serious warning signal
Welcome!
When looking at the charts this morning I noticed something very concerning that could cause a big drop in Bitcoin´s price, let´s get right to it.
If you look at BTC´s 3D historical volatility you can see that it is extremely low. Now, when volatility is that low it can stay low for only a certain period of time before it has to start expanding and when it starts to expand you can generally expect fast, big and overall volatile moves. The bigger the time frame, the bigger the move is likely going to be.
To be perfectly clear, it does not provide direction/say in which way the price is going to expand so you need to use other tools to determine that.
With that being said, the reason for a strong bearish bias is the fear and greed index. While I can´t show it to you here you can check it for yourself and see that it is currently at a very high 90 - extreme greed.
Can one really expect volatility expansion to come to the upside when the entire market is already overly bullish? In my opinion, it´s very unlikely.
IF volatility expansion indeed comes to the downside I would be looking at a retest of the white rectangle as the target at which point I would be looking at the retest as a mayor buy opportunity before BTC ultimately moves higher.
Thank you for reading!
When looking at the charts this morning I noticed something very concerning that could cause a big drop in Bitcoin´s price, let´s get right to it.
If you look at BTC´s 3D historical volatility you can see that it is extremely low. Now, when volatility is that low it can stay low for only a certain period of time before it has to start expanding and when it starts to expand you can generally expect fast, big and overall volatile moves. The bigger the time frame, the bigger the move is likely going to be.
To be perfectly clear, it does not provide direction/say in which way the price is going to expand so you need to use other tools to determine that.
With that being said, the reason for a strong bearish bias is the fear and greed index. While I can´t show it to you here you can check it for yourself and see that it is currently at a very high 90 - extreme greed.
Can one really expect volatility expansion to come to the upside when the entire market is already overly bullish? In my opinion, it´s very unlikely.
IF volatility expansion indeed comes to the downside I would be looking at a retest of the white rectangle as the target at which point I would be looking at the retest as a mayor buy opportunity before BTC ultimately moves higher.
Thank you for reading!
Comment:
In my opinion Bitcoin has found its top
Comment:
3D volatility has finally started to expand and that expansion is, as predicted, coming to the downside
lower targets likely
lower targets likely
This move, however, hasn´t changed much in regards to this analysis - 3D volatility is still extremely low and with price this overextended I still think the big volatility expansion is going to come to the downside