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Bitcoin's Volatility Hits Record Low, Raising Market Speculation

24/09 18:33

According to PANews, Bitcoin's implied volatility has reached its lowest point since 2023, sparking interest in whether a significant market shift is imminent. Previously, a similar low was observed before Bitcoin surged from $29,000 to $124,000, marking a 325% increase. CryptoQuant's on-chain data supports this speculation with several indicators. Firstly, the reserves held by exchanges have decreased, with total balances nearing multi-year lows. This suggests a reduction in Bitcoin available for immediate sale, historically signaling a supply squeeze when demand rises. Secondly, the Market Value to Realized Value (MVRV) ratio remains in a neutral zone, indicating that investors are neither deeply in loss nor holding excessive profits. This results in a market devoid of panic selling or profit-taking pressure, with a prevalent 'wait-and-see' attitude. Additionally, funding rates are balanced, showing no excessive long or short positions, which aligns with the current low volatility and suggests the market is gathering momentum. These three signals collectively paint a consistent picture: Bitcoin supply on exchanges is dwindling, investors are holding their positions, and the derivatives market remains calm. Despite the implied volatility indicating one of the calmest phases in years, historical patterns suggest such periods rarely persist for long.

Bullish

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