An analyst has pointed out how Bitcoin has seen its range compress recently. Here’s what could happen next, according to past pattern.
In the graph, the red line is tracking the highest point in the cryptocurrency’s price over the last 180 days. Similarly, the green one is a representation of the lowest point.
The chart on the bottom, highlighted in orange, displays the percentage difference between the two lines. It’s visible that this value has seen a notable decline for BTC recently, a sign that the asset’s 180-day range has faced compression.
As Adler Jr has marked in the chart, this is the third time in the current cycle that the Bitcoin price has compressed into such a tight range. Generally, whenever BTC’s volatility coils like a spring, it tends to unwind in an explosive manner. This is what happened with the last two instances, where the tight range led into a sharp rally for the coin each time.
As displayed in the chart, the metric’s value has been higher than 0.5 for five out of the six cohorts listed. Such a value corresponds to a dominant trend of accumulation. The only cohort that’s still stuck selling is the 1 to 10 coins one.
Bitcoin has been inching closer to its all-time high as it has surged to $106,000.
