Bitcoin Traders Adjust to the Return of Market Volatility
Following a series of trading sessions that can only be described as crashes, Bitcoin entered a highly volatile period on October 25, surging by nearly 20% as day traders quickly swooped in to profit from a volatile market. After months of stability and a bullish rally that surpassed the highly psychological $10,000 price level, volatility seems to have returned to the markets, and investors are closely following the action.
When Bitcoin traders in New York started following the October 25 morning session, BTC/USD was trading as low as $7,393 with a mostly sideways volume. Technical charts did not reveal any major signals or opportunities to take market positions, but a single statement by Chinese President Xi Jinping turned things around. A brief video clip broadcast by CCTV showed President Xi talking about opportunities presented by blockchain technology, which he believes should be seized by the People’s Republic of China. Shortly after this statement was made, BTC/USD started climbing rather quickly, and it reached a high of $8,762.68 by the time Wall Street traders were coming back from lunch.
The Latest Fluctuations to Bitcoin Values
What is interesting about the October 25 BTC spike is that it was purely based on fundamental news headlines. Technical traders were waiting for a signal called the "death cross," which forms when moving averages reach a certain point of no return, but the statement by President Xi effectively prevented such a bearish turn of the market. As can be expected, once BTC/USD appreciated by 20%, sell orders caused it to retreat a couple of points, but by Friday night, it was already dancing around the $9,293 mark.
This new period of Bitcoin volatility will not be welcomed by all traders. Institutional investors who have not yet entered the market because of how unstable it feels will likely remain in the sidelines. What happened on October 25 is a clear example of FOMO trading, whereby investors show their "fear of missing out" and create a rally that may or may not last.
The final week of October 2019 will be crucial for Bitcoin traders as they try to determine if the $10,000 price level is once again attainable and if it will become sustainable. Traders who follow technical analysis will watch closely and try to figure out if BTC has what it takes to stay away from the $9,000 danger zone. There is also the prospect of a Santa Claus rally on the horizon, but a couple of months can feel like an eternity when volatility rules the markets.