Bitcoin market volatility has been very low lately. However, these periods of inactivity are usually followed by significant movement, but in which direction will it be?
On May 22, on-chain analytics platform Glassnode reported that volatility has been extremely low in recent weeks.
You mentioned that the seven-day price range of Bitcoin was only 3.4%. Moreover, this has held within one of the narrowest ranges over the past three years.
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She added that the pressure in the price range is similar to that in January. There was also a similar low range in July 2020, “both of which preceded large market moves.”
“This indicates that there may be high volatility on the horizon.”
Bitcoin prices fluctuated around $17,000 in December and January for weeks before surging above $23,000 over about two weeks. A similar rally happened in July 2020 when, after weeks of hovering above $9,000, BTC turned around $12,000.
Furthermore, the markets have been in choppy territory on both occasions, which is where they are at the moment. BTC is still down 61% from its all-time high in November 2021 and could drop further in the next big market move.
On May 21, the trader and analyst “Rekt Capital” comment A weekly close below $27,600 “would double confirm the breakdown and could lift BTC to continue its downside trend.”
The weekly candle closed around $26,800, so the analyst can think of something. “The price needs to regain $27,600 to get a chance for the bullish momentum,” he added.
Moreover, bitcoin mining inflows indicated an increase in selling pressure.
BTC price forecast
Bitcoin is down 1.3% on the day to trade at $26,758 at the time of writing. The asset fell to an intraday low of $26,543 in the early hours of May 22 but appears to be bouncing back.
BTC has been in a choppy sideways channel for the past 10 days as volatility decreases. On the downside, support can be found around $24,400 in case of a significant move. This has also been an area that analysts have been looking forward to in the series.
It represents the cost basis of the young coin offering and a psychological level to watch, Glassnode wrote earlier this month. It also marked February highs that could be revisited if the correction continues.
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