Permanent plateau or consolidation until the next plunge?
Here is the daily chart as of 9:00 AM EST today:
The 30-day standard deviation of daily returns has crashed by about 80% since the beginning of the year, from 8.41% to 1.72%. However, 30-day volatility was even lower near the end of 2016.
Bitcoin is now down about 65% from its high earlier this year but now it appears a plateau is forming around 6500. It is like some “forces” want to lower volatility and bring stability to the market.
The other scenario is that the market is consolidating in expectation of the next leg down towards the 1000 level. This scenario cannot be discounted. This is not equity or bond markets but a new market and longer-term predictions are impossible to make.
I still think bitcoin will stabilize a lot lower near the 1000 level. But this is subjective and not founded on analysis. But even near 1000 it will have a central role to play in this new cryptocurrency market.
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Charting and backtesting program: Amibroker