Bitcoin’s Low Volatility and the Need for a New Price Range
The latest report from Glassnode Insights highlights the historically low levels of volatility in Bitcoin. This is evidenced by the narrow trading range and the 2.9% separation between the asset’s Bollinger Bands. The report suggests that this low volatility combined with investor fatigue is leading to marginal profits or losses for traders.
Key points from the report:
– Bitcoin’s volatility is at an all-time low, with a trading range of $29,050 to $29,775 over the past three weeks.
– The low volatility in Bitcoin may be reflective of broader markets, as the S&P 500 and oil price 30-day volatility are also at their lowest levels since November 2021.
– Short-term holders of Bitcoin are concentrated in the price range of $25,000 to $31,000, creating short-term selling pressure.
– Long-term holders of Bitcoin have reached an all-time high in supply, indicating a strong conviction in the asset.
– The potential impact of a global economic recession on Bitcoin’s price should not be disregarded.
Is Bitcoin’s Tranquility Preceding Turmoil?
The report raises the question of whether the current low volatility in Bitcoin and other markets is a sign of tranquility before a period of turmoil. Factors such as rising government and corporate borrowing costs, higher yields in equities, and potential inflation pressure could disrupt the current stability.
The uncertainty lies in how Bitcoin holders will react to these stressors, as the asset class is relatively young compared to traditional markets. Only time will tell if Bitcoin will serve as a hedge against escalating inflation.
Note: This article is for informational purposes only and should not be considered legal or investment advice. The views expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.
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