Bitcoin’s volatility trap score has reached 91 as BTC tests the area below $65,000, with short-term technical strength returning while longer-term indicators continue to reflect bearish pressure.
BTC was trading around $63,500 on August 18, marking a roughly 1% daily gain after rebounding from $62,751. CoinGecko data shows the recovery carried Bitcoin back above the 78.6% Fibonacci retracement at $63,152, bringing the $65,000 resistance zone back into focus.
The wider crypto market remains in a wait-and-see phase ahead of several potential catalysts in September, including further CLARITY Act discussions and the FOMC minutes expected on September 16.
Short-Term Indicators Turn Positive
Bitcoin’s 4-hour chart has started to show stronger buying activity. BTC moved above the Bollinger Bands’ midpoint at $63,173 and subsequently crossed the upper band near $63,774, suggesting that momentum has picked up beyond the recent consolidation range.
The 4-hour Chaikin Money Flow also advanced to 0.24, indicating that capital flows were supporting the latest recovery. Holding above $63,774 could leave Bitcoin targeting the $64,700-$65,000 resistance area.
The daily indicators remain less convincing. Bitcoin’s MACD stood near -183, compared with a signal line around -101, while the histogram remained negative at approximately -82. The readings suggest that bearish momentum from the previous week is still present.
Daily Chaikin Money Flow was also slightly negative at -0.05. The contrast with the positive 4-hour reading indicates that short-term demand has improved, but broader market flows have yet to turn decisively positive.
Volatility Compression Points to a Bigger Move
Glassnode co-founder Rafael Schultze-Kraft said on X that Bitcoin’s implied volatility has fallen into the bottom 2% of its historical range. At the same time, implied volatility remains roughly 1.5 times higher than realized volatility.
The combination has pushed Glassnode’s volatility trap score to 91 out of 100, its strongest reading in more than three and a half years. Schultze-Kraft noted that the indicator does not determine the direction of Bitcoin’s next move, but such extreme compression has historically been followed by significant volatility.
CoinGlass liquidation data points to an important liquidity cluster around $64,000, with another larger concentration near $64,700. A breakout through these levels could trigger short liquidations, adding to buying pressure and potentially sending BTC toward $65,000.
If Bitcoin turns lower, downside liquidity around $62,700 and $62,200 could become relevant. These levels broadly correspond with the $63,000 support and $65,000-$65,600 resistance ranges highlighted in an August 18 market report by Sunday Guardian, which also reported more than $385 million in spot Bitcoin ETF outflows during the previous week.
Bitcoin Faces Key Breakout and Breakdown Levels
A daily close above $64,000 could confirm further recovery and put $65,000 within reach. A successful move beyond that level could open the way toward $67,357, the 61.8% Fibonacci retracement of Bitcoin’s decline from $82,825 to $57,796.
Conversely, losing $63,152 could expose Bitcoin to $62,500. A deeper sell-off could push the cryptocurrency toward $60,000, while $57,796 remains the major bearish reference point.
BTSE chief operating officer Jeff Mei said traders are focused on the upcoming FOMC minutes for potential signals regarding interest-rate cuts. The market is also watching whether the CLARITY Act gains additional Senate attention before the legislative recess.
Mei added that institutional demand for AI stocks remains a competing destination for capital that could otherwise flow into crypto. Continued strength in AI equities could therefore encourage liquidity rotation between the two markets, potentially limiting Bitcoin’s near-term upside.
