Why Bitcoin May Make A Powerful Move Soon

Forbes – After an explosive 2017, Bitcoin and other cryptocurrencies have been going nowhere fast in 2018. Bitcoin’s volatility has fallen signficantly as it squeezes to a fine point in what appears to be a descending triangle pattern. Ironically, in the financial markets, unusually low volatility often occurs before powerful, volatile moves – the “calm before the storm,” so to speak. When Bitcoin finally breaks out of this pattern in a convincing manner, a significant move is likely to occur.

According to the chart below, Bitcoin’s descending triangle has been forming since February/March of this year. $6,000 is the key support level to watch. Descending triangles are bearish patterns, so there is a higher probability of a breakdown from here, but it is important to be open to the idea of an upside breakout as well. Also, beware of the risk of a head-fake move in which Bitcoin initially breaks out in one direction, only to head in the opposite direction while making a more sustained move.

I’m watching for a convincing breakout or breakdown from this descending triangle pattern with strong volume for further confirmation.

Jesse Colombo is an economic analyst, registered investment advisor, and Forbes contributor who warns about bubbles and future financial crises.