Recently, Bitcoin has attempted to maintain its stability despite various turbulent financial events. However, the clue is expected to be short-lived, with a surge in volatility looming, according to on-chain analytics firm Glassnode.
According to Glassnode, Bitcoin’s high volatility is on the horizon as liquidity and trading volumes fall across the board. It noted that with price ranges compressed and on-chain transactions at cycle lows, BTC is unlikely to remain where it is for long.
As reported by Todayq News, previous data from Glassnode indicated that the asset’s seven-day price range hit record numbers. It made it clear that Bitcoin’s spread is one of the narrowest it has been in the past three years.
It said the current trend was comparable to January 2023 and July 2020, both of which preceded large market moves. The on-chain analytics firm said this could indicate that high volatility is looming.
Additionally, on Wednesday, Glassnode published a tweet highlighting its recent assessment of common technology pricing models. Bitcoin spot prices are reportedly still slightly above the current equivalent 111-day moving average (DMA) and 200-week moving average (WMA), providing an area of support.
Against this backdrop, both the 111-day SMA and the 200-day SMA coincide with the $26,200 level. Analysts at Glassnode said that the confluence between the 365-day SMA ($22,300) and the 200-day SMA ($22,600) could be considered an area to watch for price action if the price moves below the aforementioned levels. In this case, the well-defined range is between $22,300 and $26,200.
Additionally, Glassnode highlighted that Bitcoin is approaching historically oversold levels, as the current adjusted MVRV ratio coincides with historically oversold levels seen at the March cycle lows of 2018, 2019, and 2020.
Several cryptocurrency analysts and influencers have also highlighted Bitcoin’s increasing volatility. Cryptocurrency analyst Will Clemente has drawn attention to a significant compression on the BTC chart, which he sees as a “big move soon.”
Meanwhile, another cryptocurrency analyst named Ali tweeted:
Bitcoin appears to be losing all major areas of support. This raises the odds of the next significant demand wall correction between $23,200 and $24,000, where 850,000 addresses previously bought 340,000 BTC.
Bitcoin outflow levels have maintained traction recently, with exchange balances continuing to decline. The balance of bitcoin transactions has fallen below 12%, the lowest level since it was first achieved at the beginning of the year.
As a result, BTC investors have been keenly watching the asset as it maintains stability, but for now, whether investors’ intentions will continue with the expected volatility remains a question. As of this writing, Bitcoin is changing hands at $26,387.60, up about 0.25% from the past day.
Source of information: compiled from TODAYQ by 0x information.Copyright belongs to the author Samvidha Sharma, without permission, may not be reproduced