Bitcoin’s consolidation phase seen throughout all of May and June is showing few signs of letting up anytime soon and has caused the cryptocurrency’s volatility levels to hit multi-year lows.
Although there aren’t many overt technical catalysts for volatility in the near-term, there may be a few events that could help to shake up BTC’s consolidation phase.
These factors also seem to favor the cryptocurrency’s bears heavily, and they could trigger a sharp selloff in the days and weeks ahead.
One analyst spoke about these factors, pointing to a recent EMA bear cross, a litany of economic events taking place this week, and the U.S. Tax Day being this Wednesday as a few factors that could help break BTC’s sideways trading.
Bitcoin’s Consolidation Phase May Not Persist for Much Longer
At the time of writing, Bitcoin is trading down marginally at its current price of $9,225.
BTC has struggled to move out of the lower-$9,000 region, despite attempting to do so earlier this week.
This has caused it to narrow its trading range and extend its bout of consolidation, which first began in early-May.
One popular cryptocurrency analyst explained that three factors could trigger some volatility in the week ahead.
- A recent bear cross between Bitcoin’s 12-day and 26-day EMAs
- Multiple economic events taking place this coming week
- Tax Day in the U.S. on this Wednesday
He postulates the confluence of some of these factors will create volatility in the traditional markets as well, which could help give Bitcoin some directionality.
“BTC – goes into the weekend price action alone below the MA50 and in a bear cross EMA12/26…Lots of economic events happen next week…Tax Day Wednesday…Expect volatility to increase,” he said.
Image courtesy of Big Chonis. Chart via TradingView.
A few events to watch in the week ahead include the federal budget discussions on Monday, the consumer price index on Tuesday, initial jobless claims on Thursday, and the consumer sentiment index on Friday.
U.S. Stock Market Could Influence BTC in the Week Ahead
Despite the three factors mentioned above potentially being bearish catalysts for Bitcoin, technical strength in the stock market could help lift the cryptocurrency higher.
One analyst spoke about this yesterday just after the stock market’s weekly close, saying:
“BTC [won’t drop] when the S&P looks like this. S&P looks like it’s flipping the range high and on its way to 3200, meaning BTC should be on its way towards 9370.”
Image Courtesy of Chase_NL. Chart via TradingView.
Because Bitcoin does remain generally correlated with the stock market, how it trends next could primarily be dependent on how the market reacts to the critical economic events taking place in the week ahead.
Featured image from Shutterstock. Charts from TradingView.