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Bitcoin’s Calm Before the Storm: What’s Next After Record Low Volatility?
Bitcoin Consolidation: Are We on the Verge of a Price Explosion?
Bitcoin’s Unprecedented Stability: What’s Driving the Silent Market?
Is Bitcoin About to Break Out? Understanding the Tightest Range Since 2015
Bitcoin (BTC) is renowned for its volatility, but lately, this has not been the case. Since the end of November, Bitcoin has been trading within a narrow range, fluctuating between $91,000 and $109,000.
This signifies that Bitcoin’s volatility has significantly compressed. According to Glassnode data, the 2-week realized volatility, which reflects how volatile the asset has been over the past two weeks, has dropped to 32% annually, one of the lowest figures in years. Additionally, the options-implied one-month volatility, which is the market’s expected volatility for the next month, has dipped below an annualized 50%, again marking a low point in recent years.
To understand just how tight Bitcoin’s trading range has been, analyst Checkmate introduced the “Choppiness Index”, which shows that on a weekly basis, Bitcoin is currently experiencing its highest choppiness since 2015. This highlights just how compressed this market has been.
Volatility tends to revert to the mean, meaning that when an asset experiences extended periods of calm, it often signals a significant move in either direction. The longer and tighter the consolidation, the more explosive the eventual price movement.
In short, Bitcoin’s prolonged range, the tightest it has been since 2015, is likely setting the stage for a massive price action. The big question is: will Bitcoin break higher or lower? Only time will tell.
