Key Points
- Bitcoin’s one-week realized volatility has dropped to 23.42%, nearing historical lows.
- Such low volatility often precedes significant market moves and could indicate a potential price breakout.
Bitcoin’s one-week realized volatility has recently dropped to 23.42%.
This is approaching historical lows that have only been reached a few times over the past four years.
Low Volatility: A Precursor to Major Moves?
Bitcoin’s volatility has been on a steady decline since late 2024, with current readings around the 23% zone.
This has often led to major price swings, setting the stage for potential breakouts.
When volatility is suppressed, it tends to build up pressure in the market.
This can result in strong moves in either direction.
Previous instances of similar compressions were usually followed by bullish surges, especially when Bitcoin was trading near important technical levels.
A review of the volatility chart confirms this trend.
Current Market Sentiment and Price Trends
At the time of writing, Bitcoin was trading at $96,450, showing slight gains from previous levels.
The 12-hour price chart showed that Bitcoin was struggling to hold above its 50-day moving average, but remained above the 200-day moving average.
The Bollinger Bands were tightening, indicating a potential price move.
The Choppiness Index was at 48.53, suggesting the market was nearing the end of its consolidation period.
What’s Next for Bitcoin?
With volatility nearing historic lows, the market may be preparing for a significant move.
If Bitcoin maintains support around $96,000 – $97,000, a breakout above $98,500 could trigger further upside momentum.
However, if Bitcoin fails to sustain its current levels, it may retest support around $94,000 before any significant recovery.
Investors and traders should look out for volatility expansion signals, particularly through Bollinger Band widening and increased trading volume, to confirm the direction of the next big move.