Bitcoin reached a new all-time record of $124.500 only hours before, but this was a short-lived celebration as it quickly dropped to $121,500. Market opinion has been split by the sudden drop. Some analysts see this as an indication of declining momentum while others view it as a healthy break before another breakthrough attempt.
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Adding to the intrigue, key data from CryptoQuant reveals that BTC volatility — measured by the 30-day Price High & Low metric — has compressed to its lowest point in two years. This metric is used to track the spread between Bitcoin’s rolling monthly highs and lowests. The current tightening suggests an unusual balance between demand and supply. The liquidity has been grouped above the local highs of $120K as well as below recent lows at $113K. This creates a coil-spring like effect on price.
History has shown that such compressions of volatility often occur before significant increases in range. Now the question is whether Bitcoin’s long-term upward trend will continue, or if it will slip further into a correction as selling pressure increases. The market is nearing record highs. volatility At multi-year lows traders prepare for what may be the next major move in Bitcoin’s 2025 rally.
The Bitcoin volatility compression signals an imminent move
According to top analyst Axel Adler, Bitcoin’s 30-day Price High & Low metric It is displaying one of its most tightest readings for years. The range between BTC’s rolling 30-day high and low has narrowed significantly, while the bands themselves — representing the rolling maximum and minimum prices — have compressed tightly around the current price. This is an excellent example of volatility contracting.
Adler says that this compression is typically the result of a balanced supply-demand situation and low volatility. During this period, liquidity tends towards the highs of local markets, which are currently at around $120,000 and lows near $113,000, while remaining below. This results in a price range that is narrow, and traders position themselves to both sides of it.
Bitcoin’s short term structure will be determined by the next few days. If BTC can break above the $120K–$124K zone, it could trigger another leg higher in its uptrend. If BTC breaks below $113K, the chances of an even deeper correction increase, which could change market sentiment.
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Pricing Analysis for Testing the Critical Resistance Zone
Bitcoin (BTC), as shown on the chart for the eight-hour period, has fallen by just 0.14% to $121,596 after reaching $122,609 in earlier sessions. This move is just one day after BTC briefly overcame the important $123,217 level of resistance, approaching the psychological $124,000 barrier before pulling away. It is still the main obstacle for bulls because it has stopped upward movement multiple times.
Price action shows BTC maintaining a bullish structure above its major moving averages — the 50 SMA ($116,948), 100 SMA ($117,653), and 200 SMA ($112,495). The 50 SMA is acting as dynamic support. This aligns with continued medium-term strength.
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This area is a hotbed of liquidity, as evidenced by the numerous tests. If $124K is decisively broken and closed above, momentum will likely be generated and new records could be set. Conversely, a failure to reclaim $123K could lead to renewed selling pressure, with initial support at $120K and deeper support near the $117K–$118K range.
TradingView chart with Dall-E image.
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Source: www.newsbtc.com
