Bitcoin (BTC) market showing signs of imminent volatility, blasted by DailyCoin

The overall crypto market has been relatively static over the past couple of weeks, with no major price swings whatsoever. The only time significant price swings took place was on October 14, when the US released its economic data, which led to a brief period of excitement where the price of (BTC) plunged and rose again within an hour.

Bitcoin has undergone a rollercoaster of performance over the past week, mainly due to correction after the US announced its inflation numbers for September. However, despite the short, sharp swings, the leading digital currency appears to be stable again, showing minimal signs of volatility.

With the market in near stasis, insights from on-chain research firm Glassnode suggest that the crypto market is like a “coiled spring” supporting a burst of volatility.

Bitcoin price consolidation has traders dreaming of breakouts

The Bitcoin market has been almost too static compared to the weekly BTC chart. After losing more than 50% of its value in the first half of 2022 due to highly volatile conditions, the past couple of months have hosted an unusual lack of volatility.

Glassnode highlights that Bitcoin’s price action remains relatively tight, stressing that almost “all extreme prices in the weekly range” were reached within a 24-hour time frame. At the time of writing, BTC is trading at $19,650.54, up a little less than 1% for the day as it looks to break through the $20,000 key resistance level.

Glassnode notes that it is highly unusual for BTC’s price action to reach such low realized volatility. The research firm suggests that all previous instances of low realized volatility were preceded by “a highly volatile move.”

Despite this, Glassnode adds that the volatility is brewing from Bitcoin markets outside the chain, and to a large extent from the derivatives market. Short-term options pricing suggests volatility has already hit a record low of 48% this week. Historically, when this has happened, massive volatility has followed shortly after, often exacerbated by deleveraging of the DeFi and derivatives markets.

On the other side

• The Bitcoin market has been in a downtrend for almost a year now, losing 71.58% of its value since its 2021 all-time high.

Why you should care

Examining the behavior of HODLers, it is clear that these devotees are steadfast in their commitment to holding bitcoin for the long term. According to Glassnode, the amount of bitcoin lost and trapped out of circulation in cold storage is at a 5-year high. The calculation accounts for 7,554,982,124 BTC, which means that more bitcoins are currently off the market than before the end of 2017.

Read more about Bitcoin’s low prices:

Bitcoin (BTC) Hits Two-Year Low: Should You Be Scared?

Binance wants to support BTC mining. Find out more:

Binance Pool (NASDAQ:) Unveils $500 Million Fund to Support Bitcoin (BTC) Mining

See the original on DailyCoin