3 reasons why Bitcoin price volatility may spike before the monthly close

 As the monthly candle close of Bitcoin (BTC) comes closer, signs of heightened volatility are emerging. With just four days until the highly anticipated expiration of Chicago Mercantile Exchange futures contracts and Deribit options, BTC’s near-term direction remains uncertain.

Three reasons to expect a spike in volatility over the next week are BTC’s prolonged consolidation, a key resistance level overhead, and the sizable expirations of BTC futures and options contracts.

Bitcoin consolidates for nearly a week

On Aug. 17, the price of Bitcoin surged to as high as $12,486 on Coinbase, achieving a new yearly high. Since then, the price has consolidated within a tight range and been unable to break above $12,000 again.

When Bitcoin consolidates for extended periods without clear price movement to either direction, it tends to see high volatility. Since Aug. 19, the Bitcoin price has stayed within a 4.5% range, which presents a tight range for BTC.

BTC/USD nears a crucial support

BTC/USD nears a crucial support. Source: TradingView.com, Mayne.

A pseudonymous trader known as “Mayne” said the $11,650 support level is critical for BTC in the short term. Referring to the $11,650 to $11,730 support range, the trader said:

“If we can hold the grey, wick into it could be a long entry. I think we’ll push up to $12.1k. Lose the grey, flip short towards $11.1k.”