Bitcoin is showing signs of an impending breakout as its average price across multiple time frames converges, signaling low volatility and a potential significant price movement.
Tight Price Clustering Indicates Imminent Breakout
Bitcoin’s average price over 5-day, 30-day, and 50-day periods has become nearly identical, indicating low volatility and a potential for a price breakout. Real Vision’s chief crypto analyst, Jamie Coutts, highlighted this trend in a June 4 post, noting that Bitcoin’s prices across these periods have all fallen within a narrow 5% range.
Simple Moving Average Signals Low Volatility
On June 4, Bitcoin’s Simple Moving Average (SMA) showed convergence across three different periods: 5-day, 30-day, and 50-day. These averages fell between $65,000 and $68,239, indicating extended low volatility. This tight consolidation suggests a possible breakout, though it also raises the potential for a price retrace.
Currently, Bitcoin trades above these SMAs at $70,840, according to CryptoMeter data. TradingView’s Moving Average Indicator rates Bitcoin as a “Strong Buy,” considering both the SMA and the Exponential Moving Average, which weighs more recent prices more heavily.
Critical Price Levels and Historical Context
On the same day, Bitcoin briefly reached $71,040 before retracing. This level is crucial for traders aiming for Bitcoin’s all-time high of $73,679. Over the past 30 days, Bitcoin maintained its key support level of $60,000, peaking at $71,946 on May 21 but not quite reaching $72,000.
Also Read: Crypto Exchanges See $3B Ethereum Exit Post ETF Approvals
Market Context and Bank Instability
While Bitcoin’s breakout direction remains uncertain, the broader financial context could play a significant role. Coutts pointed out the increasing number of U.S. banks at risk of collapse. On May 29, the Federal Deposit Insurance Corporation (FDIC) reported a 21% increase in banks on the “Problem Bank List” for the first quarter of 2024, reaching 63 banks.
In March 2023, after the collapse of Signature Bank, Silvergate Bank, and Silicon Valley Bank, Bitcoin’s price surged 35% over nine days to $27,050. This historical precedent suggests that Bitcoin may benefit from further financial instability.
