Is Bitcoin set to surge after period of low volatility?

investmentnews.com:

Bitcoin may be closer to bursting out of a period of unusually low volatility if chart patterns and the token’s history are any guide.

Some gauges of how much the largest digital asset swings around dropped toward a record low in the past month as Bitcoin hovered around $30,000. The lull coincided with a cooling in the token’s 2023 rebound from last year’s rout. The year-to-date gain stands at 80%, down from 90% through mid-July. 

Potential catalysts for a breakout include pending applications from firms like BlackRock Inc. to start the first spot Bitcoin exchange-traded funds in the US, which could stoke demand. On the flip side, investors remain alert to the risks exposed by the 2022 crypto crash. The spotlight most recently has fallen on the health of the Huobi exchange linked to crypto mogul Justin Sun.

“An approaching ETF verdict may disrupt the slow phase of the market of late,” Bendik Schei and Vetle Lunde of K33 Research wrote in a note, flagging Aug. 13 as one of the deadlines for a Securities and Exchange Commission response to an ARK Investment Management LLC application. “Whether the SEC postpones, rejects or approves ARK’s filing could ignite volatility in the market.”

Bitcoin retreated about 1% to $29,725 as of 8:05 a.m. in London on Wednesday. Smaller virtual currencies such as Ether and Cardano also struggled for traction. Key charts below provide hints on Bitcoin’s volatility outlook. 

Bitcoin has traced a falling wedge — a narrowing price range — that resembles a pattern that presaged a June rally. Chart analysts often view a falling wedge as bullish. A break of the pattern’s upper line would boost their conviction.

“We moved to a positive bias in Bitcoin,” Tony Sycamore, a market analyst at IG