Following dwindling market shifts for an entire month, with BTC featuring within a tight price range, crypto analysts anticipate an upcoming blast of volatility that could best its 40% gains experienced in January. This conclusion follows a detailed review of the Bitcoin market dynamics in the recent installment of the weekly newsletter, “The Week On-Chain,” from analytics giant Glassnode.
BTC heavily relied on the $30,000 mark as its tipping point, culminating in an atmosphere of suspense among both crypto optimists and pessimists. As renowned analyst Aksel Kibar noted, this backdrop of uncertainty typically prefaces robust market oscillations. While the subsequent direction of this market move still hangs in the balance, Kibar maintained his commitment to previously defined market boundaries.
The Bollinger Bands indicator —a renowned measure of market volatility— suggests that this significant market activity should not be long off. The bands, which provide a simple moving average to predict a shift in an asset’s price trend, are currently more constricted around BTC than they have been since the start of the 2023 spike.
Despite market activity standing at remarkably low volatility with an extreme compression of the 20-day Bollinger Bands, “The Week On-Chain” stressed that when BTC last demonstrated this level of compression in early January, the ensuing breakout propelled the coin’s value and maintained that trend throughout the month. Ultimately, January closed with BTC gaining about 40%.
Interestingly, Glassnote found that the market was not stimulated by active buying or selling at current levels, whether for profit or loss. This dormancy is not an unfamiliar occurrence in the market panorama following price cycle lows. The prevailing calm before the storm suggests that although Bitcoin’s market cap is approximately twice as large today, prudent investors sitting on massive profits or losses are curiously withholding their on-chain coin expenditure.
However, as crypto enthusiasts, we realize that markets are innately unpredictable. While Bitcoin’s potential to outdo its January performance is plausible, the reality of actualizing such an ascent is invariably subject to a myriad of unpredictable influences. After all, crypto coins and the blockchain technology that underpins them evolved from inherently cutting-edge paradigms which frequently defy traditional expectations. Thus, we await the forthcoming volatility with bated breath.
Source: Cointelegraph
