Bitcoin’s Volatility Trap Signals a Potentially Larger Move

Bitcoin USD trades near $63,500 as of August 18, up roughly +1% on the day after bouncing off an intraday low of $62,751, according to data from CoinGecko. The recovery pushed price above the 78.6% Fibonacci retracement at $63,152 and left BTC near the $65,000 resistance area.

The entire crypto market is seemingly at an impasse as it awaits key events in September, including the next CLARITY Act meeting and the next FOMC minutes on September 16.

Bitcoin 4-Hour Momentum Firms Up While Daily MACD Stays Negative

On the 4-hour chart, Bitcoin moved above the Bollinger Bands' middle line at $63,173 and crossed the upper band near $63,774, signaling that short-term buying pressure has accelerated beyond the recent trading range.

Chaikin Money Flow on the same timeframe rose to 0.24, indicating that volume backed the move higher. Holding above $63,774 keeps the immediate focus on the $64,700–$65,000 resistance band.

The daily chart tells a more cautious story. The moving average convergence divergence reading stood near minus 183 against a signal line near minus 101, with the histogram still negative at roughly minus 82, evidence that bearish momentum from the prior week's decline has not fully cleared.

Daily Chaikin Money Flow remained slightly negative at -0.05, in contrast to the positive 4-hour reading, suggesting short-term buyers have returned even as broader capital flows remain weak.

Volatility Trap Score Hits 91 as Compression Persists

Glassnode co-founder Rafael Schultze-Kraft noted in a post on X that Bitcoin's implied volatility has fallen into the lowest 2% of its historical distribution, even as it remains about 1.5 times higher than realized volatility.

That gap has pushed Glassnode's volatility trap score to 91 out of 100, its highest reading in more than three and a half years. Schultze-Kraft cautioned that compression alone does not signal direction – only that a larger move has historically followed similar setups.

CoinGlass's one-week liquidation heatmap shows the nearest overhead cluster near $64,000, with a larger concentration around $64,700; a move through those levels could force short sellers to close positions, adding buying pressure and potentially pushing BTC toward $65,000.

Downside liquidity sits near $62,700 and $62,200, levels that would come back into focus on a rejection. That range broadly matches the $63,000 support and $65,000–$65,600 resistance zone flagged in a separate August 18 market snapshot from Sunday Guardian, which also cited more than $385 million in spot Bitcoin ETF outflows the prior week.

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Bitcoin Bull and Bear Paths From Here

A daily close above $64,000 would strengthen the recovery and open a path toward $65,000, with the next larger target near $67,357, the 61.8% Fibonacci retracement of the decline from $82,825 to $57,796.

Failure to hold the $63,152 Fibonacci level would put $62,500 back in play, and a deeper breakdown could expose $60,000, with the full retracement low near $57,796 as the broader bearish marker on the daily chart.

BTSE chief operating officer Jeff Mei told that traders are watching the Federal Open Market Committee minutes for rate-cut signals and whether the CLARITY Act draws Senate attention before recess.

He added that AI-stock demand continues to compete with crypto for institutional capital, which, if sustained, could lead to liquidity spreading between the two sectors, potentially capping the upside of Bitcoin and the broader crypto markets.

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Read original story Bitcoin's Volatility Trap Signals a Potentially Larger Move by Daniel Francis at Coinspeaker.com