Ladies and gentlemen, gather ’round for a tale of Bitcoin‘s rollercoaster ride. You see, Bitcoin, the first and largest cryptocurrency by market capitalization, has been playing it cool for weeks now. It’s been trading within a relatively stable range of $93,000-$98,000, like a bored teenager in a small town.
Bitcoin, being the attention-seeking rebel it is, sought to rise over its current all-time high of $109,114, reached Jan. 20, 2025. But alas, this rally did not gain the requisite momentum. Following Bitcoin’s second attempt to break above $105,000 in late January, the market has entered a phase of contraction and consolidation, with price momentum falling substantially across key assets.
#Bitcoin’s 1-week realized volatility has collapsed to 23.42%, nearing historical lows. In the past four years, it has dipped lower only a few times – e.g., Oct 2024 (22.88%) & Nov 2023 (21.35%). Similar compressions in the past led to major market moves:
— glassnode (@glassnode) February 21, 2025
Amid the ongoing consolidation, Bitcoin’s one-week realized volatility has fallen to 23.42%, approaching historical lows, according to a recent Glassnode tweet. It has only slipped lower a few times during the last four years, most recently in October 2024 and November 2023, when it fell to 22.88% and 21.35%, respectively. Glassnode highlighted that similar compressions in the past led to major market moves.
Similarly, BTC‘s one-week options implied volatility has fallen to 37.39%, a multi-year low. The last time IV was this low (2023, early 2024), major volatility spikes occurred. Meanwhile, long-term IV stays greater (three months at 53.1%; six months at 56.25%).
Potential scenarios
According to Glassnode, Bitcoin is approaching a decisive moment in the market — a phase where price action is primed for uncoiling. If demand remains strong, Bitcoin could establish a new range above its ATH of $109,114. But let’s not forget the cautionary tale of the boy who cried wolf. A lack of sustained buy pressure may result in a deeper distribution-driven correction, similar to prior post-ATH phases.
This would most likely be triggered by fear among recent buyers who see their newly acquired coins go from profitable to unrealized losses. Imagine the horror of buying a Bitcoin at $98,000, only to see it plummet to $97,100. Ouch!
At the time of writing, Bitcoin was up 1.49% in the last 24 hours to $98,915 after reaching an intraday high of $98,980. Bitcoin is currently confronting the short-term barrier at $99,067, which coincides with the daily SMA 50. Breaking through this level would be like breaking through the sound barrier, but for Bitcoin.
On the other hand, a massive demand zone has formed just below the current price. According to IntoTheBlock, 2.76 million addresses bought a total of 2.1 million BTC at an average price of $97,100, indicating significant buying interest at this level. If the market faces further downward pressure, this zone may act as robust support. Think of it as the cryptocurrency equivalent of a safety net.
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2025-02-21 17:33