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article imageBitcoin breaks over $6,600 but with no clear up or down direction

By Ken Hanly     Oct 8, 2018 in Technology
Bitcoin(BTC) still continues trading in a narrow range over the weekend and into Monday without any significant breakthrough up or down in spite of the fact that a sharp break has been expected for several days now.
CoinDesk's Monday analysis
In his analysis for CoinDesk posted at 12:07 UTC on Monday, Omkar Godpole notes that Bitcoin's price volatility is continuing to drop. One measure puts it at a 15-month low. Weekly volatility as measured by the difference between high and low fell to just $315 last week. This is the lowest reading since way back in July of 2017 according to Bitfinex data.
In the previous two weeks Bitcoin traded between $498 and $741. The data shows that BTC is being squeezed in an ever narrower price range. Technical data such as this indicated a decisive move is long overdue.
Bollinger bandwidth reading, another measure of volatility fell to the lowest level since December of 2016 last week also indicating extremely low volatility.
This lifeless trading pattern indicates both bulls and bears are staying on the sidelines offering little directional bias to the price. As the article went to press BTC was trading at $6,600 on Bitfinex. This represented a marginal 0.15 percent gain over 24 hours and even just 0.40 over a week.
Chart analysis
The weekly chart shows that Bitcoin was able to defend the $6,100 level the third week of December. However, there has been no strong upward follow through. Last week BTC created a doji candle. This signals indecision in the market. The odds of a big bullish move would increase if Bitcoin finds acceptance over last week's high of $6,741. If there is a move below last week's low of $6,424 perhaps the bears will take over.
The daily chart shows sideways trading that has brought BTC much closer to the falling trendline slanted downwards for the July highs. If the sideways trading continues within the next couple of days the trendline will be breached. However, breaching the bearish trendline in itself does not mean there is a bullish breakout. There must be a convincing upside move as well to confirm a bullish breakout.
The daily chart shows as well that the choppiness index has gone below the 61.8 percent level. This indicates BTC could be in the early stages of a big bullish or bearish move. Such a move has been predicted for some time but this weekend and on Monday as well there is yet no sign of it.
CoinDesk outlook
Based on his analysis Godpole's view is: "The last week's high of $6,741 and low of $6,424 are key levels to watch out for this week. BTC is closing on a long overdue range breakout, according to choppiness index. A break below $6,424 could yield a quick-fire drop to the psychological support of $6,000. A move above $6,741 would allow a sustained break above $7,000."
Present situation
It is now just starting October 9 UTC. On October 8th BTC opened at $6,582. The day's low was $6,557 and the high $6,671. It closed at $6,622 somewhat above its open but with no substantial break up. The high so far has been just $6,630 and the low the same as the open. There is still no sign of the long overdue large break up or down. The present price of Bitcoin can be found here.
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