Since early October, Bitcoin (BTC) price has been consolidating within a range around $3,400 as the 200-day simple moving average (SMA) remains an insurmountable resistance for BTC.
Bitcoin has been stuck between resistance levels of $72,000 and $54,000 since falling from its all-time high of $73,835 on March 14. The direction of the Bitcoin price is currently uncertain as the effects of aggressively dovish Federal Reserve policies and China’s stimulus measures fade.
BTC/USD daily chart. source: TradingView
Let’s take a look at why the Bitcoin price is stagnant today.
Bitcoin is stuck between the 50-day SMA and the 200-day SMA.
On September 30, Bitcoin price fell below the important support provided by the 200-day SMA at $63,525 due to geopolitical tensions in the Middle East.
There have been several attempts to bring this level back, but each has failed to trigger a broader price trend.
“If we look at Bitcoin on a daily basis, we see that the 200-day SMA is now confirmed as resistance,” cryptocurrency analyst Alan Santana said in an October 8 post.
“BTCUSD attempted to move above MA200 but failed. The session closed with a long upper candle, a session low and a very strong black candle.”
Santana was referring to price action on October 7, when the price of Bitcoin rose above $64,000 before this level of supplier congestion caused the price to fall. This “confirmed the 200-day SMA” as resistance, with the 50-day SMA providing support.
BTC/USD daily chart. source: TradingView
These indicators show that Bitcoin may continue its sideways price movement in the coming weeks.
Additional data from market intelligence company IntoTheBlock helps explain the ongoing stalemate between buyers and sellers. The IOMAP (In/Out of Money Around Price) model shows that the price is currently between two important levels.
The 200-day SMA of $63,525 is within the $61,843-$63,655 supply zone, with approximately 1.3 million BTC previously purchased from 2.4 million addresses.
Bitcoin IOMAP chart. Source: IntoTheBlock
On the downside, the 50-day SMA of $60,777 is within the buyer congestion zone of $59,958 and $61,70. This provides strong support for the bulls. Previously, approximately 1.8 million addresses purchased approximately 866,330 BTC in this zone.
Data from CoinGlass shows an increase in high bid and ask orders on both sides of the spot price. There are approximately $236.36 million worth of sell orders between the current spot price and $63,00. Meanwhile, approximately $313 million in bid orders lie between the spot price and $61,000.
These price levels are close to spot prices, indicating a tug-of-war between bears and bulls.
Bitcoin 24-hour liquidation heatmap. Source: Coinglass
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Bitcoin price volatility remains low
Bitcoin volatility has also remained low since the August 5 sell-off.
According to data from TradingView, the Bitcoin Historical Volatility Index stands at 5.48 as of October 9, well below the year-to-date high of 14.74 and the 2021 high of 42.7 reached on August 5.
Bitcoin historical volatility index chart. source: TradingView
Bitcoin’s low historical volatility means that the price of BTC is less likely to fluctuate dramatically over a short period of time. This suggests that Bitcoin could remain range bound for several weeks.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.