Bitcoin Trapped Between 50 and 200-Day Averages as Bond Market Volatility Spikes, China Stocks Slide

The top digital currency, measured by its market worth, surpassed $62,000, while the Bollinger Bandwidth, a specialized technical indicator, dipped to levels last seen before the mid-June volatility in the downward price movement.

Bollinger bands are lines that are drawn two standard deviations above and below a moving average of an asset’s price over the last 20 days. The distance between these lines gives us an idea of how volatile the asset is, with wider distances (or bandwidth) indicating higher volatility, while narrower distances suggest lower volatility. After a long period of low volatility, a sudden increase in volatility is often seen.

At the moment of reporting, the bitcoin market didn’t exhibit any indications of significant price movement. The prices were stuck in a limited band, oscillating between the resistance level offered by the 200-day simple moving average (SMA) at approximately $63,550 and the support provided by the 50-day SMA at around $60,819.

On Monday, the MOVE index, a gauge that predicts volatility in U.S. Treasury bonds, jumped by 24%, marking its highest point since early January, as indicated by TradingView.

Rising unpredictability in U.S. Treasury bonds, crucial elements in international financing and security, frequently triggers economic constriction and risk-avoidance tendencies. This scenario often strengthens the US dollar, which could exert pressure on risky investments such as stocks and cryptocurrencies like Bitcoin.

A more casual way to phrase this statement might be: Given that the idea of a very accommodative Federal Reserve has weakened, it seems the trend for the dollar index is heading upward, potentially reaching 103 by the end of the month, according to ING. At the moment, the index remains stable at approximately 102.45.

Chinese stocks slide

The Shanghai Composite Index dropped by 4.6% in Shanghai, breaking a run of ten consecutive daily gains. This downturn may be attributed to investors feeling let down by the Chinese government not providing enough fiscal stimulus as anticipated.

Beijing unveiled numerous stimulus plans at the end of September, which is believed to have sparked a significant rally and potentially drawn investment away from other stock markets in Asia and Bitcoin.

In a nutshell, if the recent dip in Chinese stock markets recovers, it could potentially boost other regional index values and even increase the price of cryptocurrencies.