Bitcoin (BTC) Primed for New Spike as History Shows Extreme Volatility After Consolidation Phase

Bitcoin has a history of making extremely volatile moves after entering a period of consolidation. History shows that BTC had a quarterly close pivot after every single consolidation phase.

Bitcoin price is trading around a key resistance point on a three-month cycle. Historical data shows that after such consolidation phases, the Bitcoin price almost always makes a three-month closing pivot.

Looking at the chart showing the three-month price movement of Bitcoin since 2010, it can be seen that periods of consolidation are often followed by significant price fluctuations. After some relative stability, Bitcoin price experienced a massive increase in early 2013, rising from around $16 to $739 in four months.

A similar consolidation pattern was seen in 2015 and 2017 at around $230, followed by a price increase at the end of 2017, with Bitcoin price reaching around $20,000. reached. More recently, Bitcoin price stabilized around $10,000 at the end of 2020 and then surged to more than $60,000 at the beginning of 2021. Past models point to another price increase, as Bitcoin is currently trading at $58,000 following another consolidation phase.

The second chart takes a closer look at Bitcoin's daily price fluctuations, focusing on the previous few months. This chart shows the 50, 100 and 200 day exponential moving averages (EMA). Recently, Bitcoin price found support from the 200-days EMA, indicating a bottom formation.

Given that Bitcoin price is currently trading above the 100-days EMA, the recent recovery from this level indicates a bullish outlook. The daily chart also shows that volume decreases during a downtrend and increases as the price begins to rise. This volume pattern usually indicates the beginning of a new uptrend and the end of a downtrend. Based on the past three months of volatility and current daily activity of the two charts, it appears that Bitcoin price is poised for another big move.

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