Bitcoin traded in a range of just under $1,500 over the course of the month of September, its narrowest monthly trading range since July 2017, data reveals.
At close of trading Sunday, bitcoin (BTC) officially ended the 30-day period with a trading range of $1,329, with prices oscillating between a low of $6,100 and a high of $7,429. Overall, this was the lowest one-month range since July 2017, when bitcoin traded in a $1,095.8 window, according to data from Bitfinex.
Further, the monthly trading volume throughout September marked its lowest amount since April 2017, according to the exchange, one of the world's largest.
Periods of low volatility often come to a boisterous end for bitcoin especially when accompanied by low volume, so it seems the cryptocurrency is gearing up for a decisive move in either direction.
Monthly Chart
Bitcoin concluded its September candlestick inside the low and high of the prior month's candlestick, creating a pattern known as the "inside bar pattern." In trending markets, the pattern can present strong buy or sell signals if current prices surpass the range of the prior month.
Since the market for bitcoin has been in a bearish downtrend since December of 2017, current prices falling below the low of September ($6,100) would likely confirm more downside action is to come and set scope for prior support/resistance level near $4,900.
On the other hand, if September's range high is surpassed ($7,429), it would be a bullish indication for longer-term upside potential and possible bull market revival.
20-Month Moving Average
The current bear market draws many parallels to that of bitcoin's bear market in 2014-15.
Notably, the current bear market just began its 11th month, while prices now sitting on the 20-month moving average (MA) for support. The timing is rather impeccable when compared to the 2014 market since its 11th month also rested on the 20-month MA.
This would suggest a decisive move could be incoming since falling below the MA in the 12th month of the 2014 bear market further cemented the trend in bearish favor, of which it was unable to escape until returning above the MA in November of 2015.
View
- This will be a decisive month for bitcoin as the low volatility suggests a big move is coming in either direction.
- Falling below September's low of $6,100 opens the door to prior support/resistance level near $4,900, while rising above Septembers high could signal a bull market revival.
- Falling below the 20-month MA would likely confirm several more months of the bear market are ahead.
Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
Money-measure image via Shutterstock; Charts via TradingView