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Glassnode: Bitcoin at historically low levels of volatility

BTC stuck in a range, showing historic level of volatility

With Bitcoin halving back in focus, the coin has hit historically low levels of volatility which has only been observed twice in its history.

Bitcoin stuck in a range may be good

Bitcoin has continued to trade between the $29,000 to $30,000 range in the last few weeks.

Per a new Glassnode report, titled “The Week On-Chain,” the benchmark crypto low volatility has caused the price to a mere 2.9% separation between the asset’s Bollinger Bands, showing a narrow trading range.

This has only happened twice in BTC price history—in 2016, when the price was around $604; and in January 2023, when the price was steadying close to $16,800.

The report noted that periods of reduced volatility, combined with investor fatigue, prompt the movement of Bitcoin. With the exits noticed in the market, it indicates that traders have been making marginal profits or losses.

Read more: Bitcoin remains in the same range as CPI data shows slowing rates

Bitcoin’s low volatility is a reflection of the market

The limited trading range for Bitcoin during the last three weeks, namely between $29,050 and $29,775 is unusual and does not require complex mathematical study to comprehend. Due to this, the annualized 30-day volatility is unusually low at 17%. Whether this pattern is unique to cryptocurrencies or if it is a phenomenon seen in other traditional markets, such as equities, oil, bonds, and currencies, is the important question.

According to Glassnode, the price distribution of short-term holders is significantly concentrated between $25,000 and $31,000. This pattern is similar to when bear market recoveries have occurred in the past. The data reveals that many of these investors are still holding losing positions, which puts short-term selling pressure on the market.

Entity-adjusted unspent BTC realized price distribution. Source: Glassnode

Since Bitcoin only became a $50B asset class six years ago, it’s unclear how its investors will respond to the pressures some traditional markets are currently experiencing. The S&P 500, oil, and bitcoin markets’ historically low volatility conflicts with this.

At press time, Bitcoin trades at $29,151, losing 0.07% in the last 24 hours.

Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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