As per an important indicator, Bitcoin (BTC) – presently valued over $100,000 – is experiencing a phase akin to a tightly wound spring, ready to disperse energy in any direction. This presents promising opportunities for traders who thrive on substantial price fluctuations.
The basis of this observation is the 60-day rolling price range, a measurement of the variance in maximum and minimum price ticks expressed in percentage terms. A condensed range suggests a balanced market characterized by demand-supply equilibrium and consistent price movements.
Data from Glassnode, a blockchain analytics firm, indicates that the 60-day range of Bitcoin is currently more compressed than its trading range. Historically, such compression has been followed by dramatic volatility surges.
“These trends have consistently preceded significant volatility bursts, predominantly in the early stages of bull markets or just before late-stage capitulations in bear cycles,” Glassnode stated in its weekly market report.
Volatility is a phenomenon that is mean-reverting. This implies that it tends to fluctuate around its average value over time. Typically, periods of low volatility are succeeded by swift price swings and vice versa.
However, volatility does not predict the direction of price movement. Greater volatility simply suggests larger and potentially unpredictable price shifts. It does not indicate whether prices will rise or fall.
Recent market activity has shown a bullish trend, particularly on the Chicago Mercantile Exchange where traders have been investing in call options. This bullish bias is also noticeable on Deribit and other exchanges.
“BTC futures are showing an upward trend, particularly on the front end, as net-long exposure from last week remains robust. Currently, bullish bets outnumber bearish ones by a ratio of approximately 20:1,” QCP Capital stated in a Telegram announcement.
Based on these observations, it is reasonable to infer that market participants are expecting a bullish resolution to BTC’s multi-week consolidation within the $90,000 to $110,000 range.
