Bitcoin Volatility Shrinks To Historical Levels, Violent Move Incoming?

Data reveals that Bitcoin volatility is presently at traditionally low ranges, one thing that has led to violent value strikes up to now.

Bitcoin 7-Day Range Has Compressed To Just 3.4% Recently

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

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

On the opposite hand, excessive values of the 7-day value 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 reveals the development within the Bitcoin 7-day value 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 latest days | Source: Glassnode on Twitter

As proven within the above graph, the Bitcoin 7-day value vary had naturally succumbed to fairly low values throughout the bear market lows that had adopted the FTX crash, because the BTC value 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 point out any vital motion. Soon after, nonetheless, the metric’s worth had seen an explosion because the rally had begun to happen.

In the subsequent few months, the 7-day value vary of the cryptocurrency had assumed comparatively excessive values, however not too long ago, the indicator has noticed one other plummet.

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

Because of this low volatility, the 7-day value vary of Bitcoin has collapsed to solely 3.4%. In the chart, Glassnode has additionally highlighted the earlier situations the place the cryptocurrency had seen this metric drop so low.

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

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

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