Bitcoin Volatility Shrinks To Historical Levels, Violent Move Incoming?

Knowledge exhibits that Bitcoin volatility is at the moment at traditionally low ranges, one thing that has led to violent worth strikes up to now.

Bitcoin 7-Day Vary Has Compressed To Simply 3.4% Just lately

In accordance with information from the on-chain analytics agency Glassnsode, the present 7-day worth vary is akin to ranges seen again in January of this 12 months. The “7-day worth vary” of Bitcoin right here refers back to the share distinction between the very best and the bottom factors that the asset’s worth has noticed over the past seven days.

This metric can present hints concerning the current volatility that the cryptocurrency has skilled. When the indicator has a low worth, it means the worth motion over the past week has been fairly stale. Naturally, this implies that the volatility of the asset is low proper now.

However, excessive values of the 7-day worth vary indicate the coin has seen a excessive diploma of fluctuation inside the previous seven days, and therefore, the volatility has been excessive.

Now, here’s a chart that exhibits the pattern within the Bitcoin 7-day worth vary (in addition to the 7-day excessive and low) over the previous couple of years:

The worth of the metric appears to have been fairly low in current days | Supply: Glassnode on Twitter

As proven within the above graph, the Bitcoin 7-day worth vary had naturally succumbed to fairly low values throughout the bear market lows that had adopted the FTX crash, because the BTC worth had been caught in a sideways motion.

These low values of the indicator continued into the brand new 12 months because the coin refused to indicate any important motion. Quickly after, nevertheless, the metric’s worth had seen an explosion because the rally had begun to happen.

Within the subsequent few months, the 7-day worth vary of the cryptocurrency had assumed comparatively excessive values, however lately, the indicator has noticed one other plummet.

The explanation behind this new plunge has naturally been the slender consolidation vary that the asset has adopted up to now week between the $27,400 and $26,500 ranges.

Due to this low volatility, the 7-day worth vary of Bitcoin has collapsed to solely 3.4%. Within the chart, Glassnode has additionally highlighted the earlier cases the place the cryptocurrency had seen this metric drop so low.

It appears just like the indicator dipped to comparable ranges method again in July 2020, and the aforementioned lows from the beginning of the 12 months had additionally noticed the indicator attain such values.

An attention-grabbing factor to notice about each these intervals of low volatility is that the worth had gone on to see speedy worth motion not too lengthy after they occurred, and the previous low was adopted by the 2021 bull run, whereas the continued rally succeeded the latter one.

If the present compressed 7-day Bitcoin worth vary will observe an analogous sample, then some wild worth motion could also be coming for the cryptocurrency within the close to future.

BTC Worth

On the time of writing, Bitcoin is buying and selling round $26,800, down 2% within the final week.

Appears like BTC has been shifting sideways in the previous couple of days | Supply: BTCUSD on TradingView

Featured picture from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com