Glassnode’s latest weekly report indicates that the prolonged oscillation of Bitcoin prices between $60,000 and $70,000 is likely to be broken soon. Several indicators suggest that market volatility has compressed to rare levels, signaling imminent large-scale price fluctuations.
Bitcoin pierced below $60,000 today (4th), reaching a low of $57,800 in the morning, marking its lowest point in two months. This retracement represents nearly a 22% decline from its peak of $73,738 in mid-March.
Many bullish investors have been unsettled by this washout scenario. However, according to the latest weekly report released earlier by the blockchain data analysis firm Glassnode:
**Bitcoin Volatility Set to Increase**
Glassnode states in the report that volatility across multiple time frames has decreased, with Bitcoin’s realized volatility (calculated every 30 days) showing negative values over 1 week, 2 weeks, 1 month, 3 months, 6 months, and 1 year. Given that their data indicates volatility can hardly decrease further, this suggests an impending increase in volatility.
Glassnode further assessed market volatility by examining the percentage changes between the highest and lowest prices within the past 60 days. According to this metric, Bitcoin’s market volatility has compressed to unusual levels. Glassnode warns that such a scenario typically occurs after long periods of consolidation and precedes significant market volatility.
Glassnode enhances volatility assessment by evaluating the Sell-Side Risk Ratio, which measures the sum of investors’ realized profits and losses relative to realized market value. Interpretation of this indicator is as follows:
– **High values** indicate investors are selling at significantly higher profits or losses relative to costs, suggesting the market may need to rebalance, typically accompanied by high price volatility.
– **Low values** indicate most expenditures are nearing their breakeven costs, suggesting the market has reached a certain balance, often implying profit and loss within the current price range have been exhausted, resulting in a low volatility environment.
Glassnode notes that the Sell-Side Risk Ratio for short-term holders (STH) has dropped to historic lows, with only 274 days out of 5083 recording lower values (5%). This suggests a certain degree of balance has been achieved during the price consolidation period, hinting at expectations of increased volatility in the near term.
**Bitcoin Still in Bull Market**
Despite Bitcoin hitting a two-month low today and the Fear & Greed Index shifting from neutral to fear at 44, Glassnode indicates that a significant portion of Bitcoin investors remain profitable. The MVRV indicator for Bitcoin currently stands at 2.04, indicating that investors, on average, hold over twice their profit. Glassnode suggests this level typically characterizes the “euphoric” phase of a bull market.
Additionally, examining the ratio between unrealized profits and losses per Bitcoin reveals an average profit-to-loss ratio of 8.2 times, historically exceeded on only 18% of trading days. All these factors align with a euphoric bull market phase, implying according to Glassnode’s report that the bull market is not yet over.
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