Bitcoin’s volatility trap score has climbed to 91 as BTC approaches $65,000, with short-term momentum showing signs of improvement despite continued bearish signals on the daily timeframe.
Bitcoin is trading around $63,500 as of August 18, gaining about 1% over the past day after recovering from an intraday low of $62,751, according to CoinGecko data. The rebound lifted BTC above the 78.6% Fibonacci retracement level at $63,152 and brought the cryptocurrency closer to the $65,000 resistance zone.
The broader crypto market remains largely directionless as traders await several important September catalysts, including the next CLARITY Act meeting and the Federal Open Market Committee minutes due September 16.
Bitcoin’s 4-Hour Momentum Improves While Daily MACD Remains Bearish
On the 4-hour chart, Bitcoin climbed above the Bollinger Bands’ middle line at $63,173 before moving through the upper band around $63,774. This suggests that near-term buying activity has strengthened beyond the recent trading range.
Chaikin Money Flow on the 4-hour timeframe also increased to 0.24, indicating that trading volume supported the latest price recovery. If BTC remains above $63,774, attention could shift toward the $64,700-$65,000 resistance area.
However, the daily chart remains more cautious. The moving average convergence divergence indicator was around -183, compared with a signal line near -101, while its histogram remained negative at approximately -82. This indicates that the bearish momentum from last week’s decline has yet to fully disappear.
Daily Chaikin Money Flow was also slightly negative at -0.05, contrasting with the positive 4-hour reading. The divergence suggests that short-term buyers have returned, while broader capital flows remain relatively weak.
Volatility Trap Score Climbs to 91 as Bitcoin Remains Compressed
Glassnode co-founder Rafael Schultze-Kraft said on X that Bitcoin’s implied volatility has dropped into the bottom 2% of its historical range, despite remaining roughly 1.5 times above realized volatility.
The difference has lifted Glassnode’s volatility trap score to 91 out of 100, marking its highest level in more than three and a half years. Schultze-Kraft noted that such compression does not indicate whether the next move will be higher or lower, but historically, similar periods of low volatility have often preceded a significant price move.
CoinGlass’s one-week liquidation heatmap identifies an initial concentration of short positions near $64,000, followed by a larger cluster around $64,700. Breaking through these levels could trigger short liquidations, creating additional buying pressure and potentially driving BTC toward $65,000.
On the downside, liquidity is concentrated around $62,700 and $62,200, which could become important if Bitcoin is rejected at higher levels. The range is broadly consistent with the $63,000 support and $65,000-$65,600 resistance zones highlighted in an August 18 market update from Sunday Guardian, which also pointed to more than $385 million in spot Bitcoin ETF outflows during the previous week.
Bitcoin’s Potential Bullish and Bearish Scenarios
A daily close above $64,000 could reinforce Bitcoin’s recovery and create room for a move toward $65,000. A stronger breakout could then target approximately $67,357, corresponding to the 61.8% Fibonacci retracement of the decline from $82,825 to $57,796.
Conversely, losing the $63,152 Fibonacci level could bring $62,500 into view. A deeper decline could send BTC toward $60,000, while $57,796 remains the key broader bearish level on the daily chart.
BTSE chief operating officer Jeff Mei said traders are closely monitoring the Federal Open Market Committee minutes for indications of potential rate cuts, while also watching whether the CLARITY Act receives further attention in the Senate before its recess.
Mei also noted that continued demand for AI-related stocks is competing with crypto for institutional capital. If that trend persists, liquidity could continue shifting between the two sectors, potentially limiting gains for Bitcoin and the broader cryptocurrency market.
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