Previous analysis has shown that Bitcoin is pulling back sharply as investors and traders alike look to consolidate crypto gains in 2019. One indicator, however, suggests that the selling pressure isn’t over yet.
The VERA Convergence-Divergence signals is a Bitcoin volatility indicator that’s flashing warning signs.
According to reports by Bloomberg, the ‘VERA Cvg Dvg’ is once again flashing a sell in 2019. The first and only other sell signal this year was a red herring in late April. If traders had taken the bait then, they would have lost out on a potential 70% gain.
A Reliable Bitcoin Volatility Indicator
This volatility indicator is designed to deal with massive price movements. And while the company behind the indicator, GTI doesn’t specifically mention Bitcoin as its primary use-case, it’s not that hard to make the connection.
“Lately, abrupt market changes, such as gaps and high volatility, are more frequent. Technological developments accelerate and, in some cases, have magnified reactions to unpredictable events. This tool will improve the management of investment strategies.”
It’s Not All One-Way Traffic Up This Bitcoin Street
Bitcoin has reduced by 18% since its late May highs, and traders would do well to get some perspective. Nothing goes up in a straight line. And if it does, it’s most likely to fall right back down on your head. From trough to peak, Bitcoin is still up almost 200% since December 2018. That’s quite lucrative for any trading level.
Such buy and sell indicators are a dime a dozen. Any indicator that correctly predicts tops and bottoms would quickly lose its effectiveness once traders flock to a new holy grail of finance. There needs to be a buyer for every seller.
Should you sell your Bitcoin as soon as possible? This may be a good move for gifted traders. Otherwise, the claim is dubious at best. Some of the cryptocurrency’s most significant price moves come in the shortest time-frame when no one’s looking.
If there ever were a perfect volatility indicator out there, it sure wouldn’t be shared out to the public.
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