Bitcoin Volatility Hits Yearly Low, Signaling Potential for Next Major Rally
A key Bitcoin indicator, which tracks market volatility on cryptocurrency exchanges, is nearing its lowest level of the year.
This pattern mirrors the conditions seen before Bitcoin’s significant rally in 2023.
According to CryptoQuant analyst Axel Adler, the current low levels of this indicator suggest that the market may be positioning itself for another upward trend. He highlighted that similar low values were recorded before Bitcoin’s 46% surge in April 2023, when the cryptocurrency reached $30,312.
Adler also pointed out that short-term Bitcoin inflows and outflows (held for less than 30 days) are much lower compared to long-term flows, which could indicate decreased volatility and suggest that investors are holding onto their positions in anticipation of potential price growth.
At the same time, CryptoQuant contributor Julio Moreno mentioned an increase in short positions as Bitcoin and Ethereum prices declined. Moreno noted that open interest has risen as prices have dropped, raising concerns in the market.
READ MORE: Bitcoin’s Rally Could Precede a Correction, Analysts Warn
Crypto market analyst Maartuun commented on the unusual scenario where Bitcoin’s price has fallen, yet open interest remains high, hinting at possible upcoming volatility. Data from CoinGlass showed that Bitcoin futures open interest stood at $35.15 billion at the time of reporting.
Increasing short positions behind today’s decline in Bitcoin and Ethereum prices.
Open Interest increased as prices fell. pic.twitter.com/DwfgOVE67j
— Julio Moreno (@jjcmoreno) September 30, 2024
In related news, an analyst recently highlighted uncertainty over Bitcoin’s ability to hit six figures by the year’s end, though a return to its all-time high remains a possibility. Swyftx lead analyst Pav Hundal remarked that while reaching $100,000 by the end of the quarter is unlikely, it’s still within reach if conditions align perfectly.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
