Will Bitcoin see wild volatility soon?

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• Bitcoin has seen a major drop in volatility over the past two weeks.
• The USD 25,000 level was a crucial support level that could see a reversal.

Bitcoin [BTC] prices have siestaed around $26,000 for the past ten days. Neither the bulls nor the bears have taken the initiative in the lower time frames. On August 23, there was a bullish structure break on the 4-hour chart.

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The heatmap of the order book showed that there was likely to be significant volatility in the coming weeks. This tied in with the spike in implied volatility seen in recent days. The report also showed steady accumulation of Bitcoin by institutional buyers.

Bitcoin has a critical level of support at $24.8k, but are the buyers strong enough to defend it?

Source: BTC/USDT on TradingView

The cyan box at $25,000 represented a bullish order block from the one day time frame. Thus, if the bulls were to recover, it is more likely to happen within this more interesting time frame.

The market structure on the 4-hour chart was bullish after moving above the recent lower high (orange dotted line) at $26.6k. However, there has been no follow-up to that breakup. Instead, BTC fell back to the $26,000 mark.

The $24.8k level also represented the low of a range that stretched from $24.8k to $31.8k. Therefore, a drop below this level would mean severe bearish pressure.

At the time of writing, the OBV continued the flat trajectory of the past week due to a lack of decisive buying or selling pressure. The RSI recovered and stood at 47.5 at the time of writing.

Prices are being pulled by the liquidity, and price action could start in early September

Source: Mob chart

MobChart’s data showed a large number of limit buy orders of $25k and $24.8k, amounting to 476 BTC and 593 BTC respectively. The $25.5k level has 126 BTC in limit buy orders. Converted to USD it was $3.2 million at $25.5k, $12.3 million at $25k and $15.4 million at $24.8k.

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In the north, the nearest significant liquidity pocket was at the local short-term high of $26.8k. On top of that, there was a large wall of sell orders at the $30k level, which was a notable resistance zone from earlier in August.

Therefore, a move towards $24.8,000 was followed by a rally towards $30,000, likely after the continued subdued volatility of the past few weeks.