Bitcoin’s volatility realized has dropped to 17,2%, its lowest level in recent months. Bitcoin analysts claim that in the past, long periods with declining volatility have preceded high-double-digit rallys.
Bitcoin volatility has dropped 56% since Q2
Bitcoin researcher Axel Adler Jr. said BTC’s realized one-week volatility smoothed out over a period of 30 days has dropped to 17.2%, from 39%, this quarter. This is a decline of 56%.
Bitcoin Volatility (one week). Source: CryptoQuant
The realized volatility (which measures the actual price movement over a period) is well below its median long-term of 40%. Adler explained how such volatility compression could lead to major price moves.
This metric, however, does not give a clear indication of direction. The metric measures momentum, not price.
Volatility over the long term gauges Tell a similar tale. The three-month real volatility is now 80%, down from 109% in early April. And the six-month real volatility has declined from 148% to 127%.
Dropping volatility across multiple time frames indicates that the price has been compressed. This could be a precursor to larger moves in the market.
Bitcoin’s three- and six month realized volatility. Source: CryptoQuant
This data is a further layer. Since more than six month, the Bitcoin growth rate, which compares growth in market capitalization to actual capitalization, is negative. Delta, the 365-day average moving, has recently dropped to -0.0013. This indicates that BTC market value grows more slowly than realized value.
Adler stated that data indicates a cooling of the market. Bitcoin’s value isn’t rising at the same rate as capital entering the network. This suggests that investors have become more conservative amid a reduced volatility in the market.
Bitcoin Growth Rate based on Market Cap and Realized Cap. Source: CryptoQuant
Related: Bitcoin price targets $78K as BTC holders defend ‘strongest near-term support’
Bitcoin enters a “tug-of-war” Analyst says phase
Maartunn is a CryptoQuant expert. said Bitcoin spent 114 trading days in a range between $60,000 and $80,00, while Bitcoin’s volatility index dropped to multi-month lows around 0.90.
Maartunn says that historically, periods of similar compression preceded price moves between 10% and 20% once the range is broken.
Maartunn analyzes the BTC index of volatility and its price. Source: X
Michael van de Poppe of MN Capital remained positive about BTC. The founder stated that the current zone is an important support zone. Van de Poppe said,
“If history repeats itself, that means that we’re going to see two great weeks of upwards momentum for Bitcoin and the end of this correction. It’s a crucial support zone for Bitcoin, which needs to hold in order to prevent a test at $61,000 to happen.”
Amr Taha, a CryptoQuant analyst pointed There is a split growing in the behavior of markets. Binance’s Bitcoin inflows for the last 30 days have increased by $5.6 Billion since April, both among retail users and whales. Retail Bitcoin inflows rose by $3.6 Billion, exceeding the increase of $2 Billion from whale wallets.
The wallets that hold between 1,000 BTC and 10,000 BTC also accumulated 55.450 BTC in May, marking the highest amount of BTC they have accumulated since February. Taha said.
“For Bitcoin, this points to a tug-of-war phase. Exchange inflows are increasing, which may create near-term selling pressure, but large wallet accumulation is also returning, which could provide underlying support if demand remains strong.”
Related: Trump says Iran will ‘work out well’: Five things to know in Bitcoin this week
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Source: cointelegraph.com
