Glassnode’s latest weekly report suggests that the long-term oscillation of Bitcoin prices between $60,000 and $70,000 is likely to be broken soon. Multiple indicators show that the market’s volatility has compressed to rare levels, indicating an imminent large-scale price fluctuation.
Bitcoin hit a low of $57,800 this morning, marking its lowest point in two months. This represents a retracement of almost 22% from its mid-March high of $73,738. Many bullish investors are left disoriented by this shakeout, but according to the latest weekly report released earlier by the on-chain data analysis company Glassnode, it suggests that Bitcoin’s larger volatility may not be over.
Glassnode wrote in the report that the volatility over multiple time frames has decreased, with Bitcoin’s realized volatility (calculated every 30 days) showing negative values across the 1-week, 2-week, 1-month, 3-month, 6-month, and 1-year time frames. As a result, the data is unlikely to go any lower, implying an increase in volatility.
Further, Glassnode evaluated the percentage change between the highest and lowest prices in the past 60 days to assess market volatility. According to this indicator, Bitcoin’s market volatility has compressed to rare levels. Glassnode warns that this situation typically occurs after a long period of consolidation and before a significant market fluctuation.
To reinforce the volatility assessment, Glassnode further evaluated the Sell-Side Risk Ratio, which assesses the sum of investors’ realized profits and losses relative to realized market value. The Sell-Side Risk Ratio for short-term holders (STH) has dropped to a historic low, suggesting an expectation of increased volatility.
Despite Bitcoin hitting a two-month low and the Fear and Greed Index changing from neutral to fear, Glassnode indicates that Bitcoin’s MVRV ratio suggests that a large part of Bitcoin investors are still profitable, portraying an enthusiastic and joyful bull market stage.
Furthermore, Glassnode’s report implies that the bull market is not over, as the unrealized profit-to-loss ratio for each Bitcoin is at a level that historically indicates a joyful bull market phase.