Dennis Porter, CEO of SatoshiActFund, notes that bitcoin volatility is currently at an all-time low. Posting a chart, he noted that the last time bitcoin volatility dropped this low, “she flew 600%“.
—Dennis Porter (@Dennis_Porter_) 27 December 2022
On-chain data reveals that bitcoin volatility is at an all-time high all the time low. In the chart published by Porter, he shows a similar drop in volatility by the end of 2020.
Bitcoin’s volatility is at an all-time low pic.twitter.com/sGOIC7cM6e
— Will Clemente (@WClementeIII) 25 December 2022
It should be remembered that bitcoin came out of the consolidation phase in October 2020. Its price was then slightly below $10,000. A year later, bitcoin hit an all-time high of $69,000 in November 2021, an increase of nearly 600%.
According to cryptoanalysts who track historical levels of BTC volatility, another time when volatility dropped to near current levels was in late 2018. This was a bear market identical to the current situation where crypto prices fell during the year.
Will history repeat itself?
At the time of writing, bitcoin fell slightly over the past 24 hours to $16,833. Bitcoin has been stuck in a tight range between $16,570 and $16,911 since December 21st.
A sustained move outside of this range is likely to determine the direction of the trend. pic.twitter.com/oGNdbcPV0k
— Ali (@ali_charts) 26 December 2022
As bitcoin consolidates, cryptocurrency analyst Ali Martinez believe that a sustained move out of $16,000 and $17,000 could determine the direction of the trend.
Citing on-chain data from IntoTheBlock, bitcoin sits between two significant supply walls: one at $16,600, where 1.46 million addresses hold 915,000 BTC, and another at $17,000. , where 1.27 million addresses hold 730,000 BTC.
However, a sustained move outside of this range can determine the direction of the trend. As we approach the year 2023, investors should keep in mind that the current macro environment, lack of regulation, confidence in crypto, and lack of regulatory clarity may continue to put pressure on crypto.