An analyst has pointed out how Bitcoin has seen its range compress recently. Here’s what could happen next, according to past pattern.
Bitcoin Has Seen Its 180-Day Range Tighten Up Recently
In a new post on X, CryptoQuant author Axel Adler Jr has talked about how compression has recently been building up for BTC again on the daily timeframe. Below is the chart that the analyst has shared.
The trend in the 180-day price high and low for BTC over the past decade | Source: @AxelAdlerJr on X
In the graph, the red line is tracking the highest point in the cryptocurrency’s price over the last 180 days. Similarly, the green one is a representation of the lowest point.
The chart on the bottom, highlighted in orange, displays the percentage difference between the two lines. It’s visible that this value has seen a notable decline for BTC recently, a sign that the asset’s 180-day range has faced compression.
As Adler Jr has marked in the chart, this is the third time in the current cycle that the Bitcoin price has compressed into such a tight range. Generally, whenever BTC’s volatility coils like a spring, it tends to unwind in an explosive manner. This is what happened with the last two instances, where the tight range led into a sharp rally for the coin each time.
This isn’t the only pattern worth noticing here. From the chart, it’s apparent that the 2017 bull run was preceded by three similar occurrences of compression in the 180-day range. That rally was quite violent and resulted in a huge gap between the 180-day high and low. “Very soon, we’ll see just how tightly the spring has been coiled this time,” notes the analyst.
In some other news, almost the entire Bitcoin market is now in a phase of accumulation, as the on-chain analytics firm Glassnode has pointed out in an X post.
The data for the Accumulation Trend Score of the various investor cohorts | Source: Glassnode on X
The indicator shared by the analytics firm is the “Accumulation Trend Score,” which tells us about whether the members of a particular Bitcoin cohort are accumulating or distributing. The investors have been divided into these groups based on the number of tokens that they are carrying in their balance.
As displayed in the chart, the metric’s value has been higher than 0.5 for five out of the six cohorts listed. Such a value corresponds to a dominant trend of accumulation. The only cohort that’s still stuck selling is the 1 to 10 coins one.
BTC Price
Bitcoin has been inching closer to its all-time high as it has surged to $106,000.
Looks like the price of the coin has been heading up in recent days | Source: BTCUSDT on TradingView
Featured image from Shutterstock.com, CryptoQuant.com, Glassnode.com, chart from TradingView.com
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