Bitcoin (BTC) Price ‘Set for Big Moves,’ but Here’s the Catch

In Brief

• Bitcoin price has moved in a tight range between the $18,800 and $20,250 level.
• The Bitcoin volatility index has dropped below 25 which could guaranteed lead to massive volatility.
• Bitcoin buyers over the last five months have a superior cost basis to those who HODLed through all the volatility of the 2020-22 cycle.

Bitcoin (BTC) price trajectory has been anything but boring, however, with volatility at a record low, price action could be prime for some major moves – either heavily bearish or bullish.

With Bitcoin’s price moving in a tight range between the $18,800 and $20,250 level, the range bound momentum has left traders and investors anticipating some big moves. However, the top cryptocurrency seems to have some other plans in store for HODLers.

Big move on the horizon
Crypto analyst Michaël van de Poppe in a recent tweet highlighted that the Bitcoin volatility index has dropped below 25 which, historically, is “a guaranteed recipe for massive volatility.” He further anticipated a “very big move on the horizon for Bitcoin.”

Notably, when the volatility index drops to such low levels, price action makes a sudden extreme move, the same has been observed in the following instances before:

1. Crash to $3,000 in 2018, a 50% price drop – major bearish move
2. Break above $4,000 to $14,000 in 2019, a 240% price appreciation – massive rally
3. Break above $10,000 in 2020 – start of the 2020 rally

At press time, Bitcoin’s price continued its battle with the $19,000 mark, trading at $19,393 – 0.58% down on the day. Diminishing trade volumes, low interest in BTC from retailers, and larger bearish macro conditions meant that there were no major bullish catalysts for BTC’s short-term price action.

However, a look at the In/Out of the Money Around Price indicator highlighted that the most significant support level for Bitcoin price was at the $19,000 price level, where 1.19 million addresses bought over 625,000 BTC.

A fall below the crucial $19,000 level amid such low volatility spells could trigger a bearish spell for the top crypto.

BTC long-term holders at a loss
Data from Glassnode highlighted that the on-chain cost basis for Bitcoin Short-Term Holders had crossed below that of Long-Term Holders. This meant that Bitcoin buyers over the last five months have a superior cost basis to those who HODLed through all the volatility of the 2020-22 cycle.

With long-term HODLers at a loss, the market confidence of the original HODLers was at a risk.

Additionally, Bitcoin Network Value to Transactions (NVT) Signal (7d MA) had reached a one-month high of 184.148. High values are generally indicative of market cap growth outpacing on-chain Transfer Volume.

Seemingly, BTC price was at a crucial crossroads where the trajectory ahead could be governed by its short-term price action as the $19,000 mark acts as a deciding point.

If BTC price falls below the $19,000 mark, the next major support could be at the $16,400 price level. However, in case of a bullish breakout, the next resistance would be at the $22,750 mark.

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