Bitcoin has recently been trading in a 60-day price range. This is what usually follows such periods of compressed volatility.
Bitcoin price action and supply are both bound in a tight range
In a new the post At X, on-chain analytics firm ShisNode has considered how sharp price action BTC has not seen recently. The chart shared by the analysis firm shows that the 60-day price range is lower than the current one (as a percentage swing).
Looks like there haven't been many instances of a tighter price range in history | Source: Glassnode on X
From the graph, it appears that there have been only a few periods where the asset has traded within a narrow range during the last two months to 60-day period. These highlights are just beaten to how tight the price action has been for Bitcoin recently.
Interestingly, examples with a more narrow price range especially unstable Period for property. Thus, it is possible that the recent stale period could end unexpanded with a really sharp swing in cryptia.
Volatility does not occur after a narrow range; However, the famous November 2019 crash, which marked the bottom of that cycle Beer marketHistorically stale in the value of the coin happened after the action.
The narrow price range is not the only sign that Bitcoin may be due for excitement in the near future, as CommsNode points out that a significant percentage of BTC supply is concentrated around the current price level.
The data for the Realized Supply Density in the +15% to -15% price range | Source: Glassnode on X
The chart above shows the data for “realized supply density” which is a On-chain metric This tells us the percentage of the asset supply that was purchased within a given range around the current spot bitcoin price.
In the graph, the analysis firm has chosen 15% as the limit, meaning that since the last price was changed between +15% and -15%.
The supply density achieved for this price range has historically followed a curious pattern: for BTC a gradual decline has been sharply accompanied by a “volatility release”.
Recently, Bitcoin has been in the former phase from the perspective of this indicator. About 20% of the BTC supply is currently concentrated in the 3% range, which is a significant amount. “This creates the potential for market volatility as investor profitability shifts,” notes Lesson.
BTC value
At the time of writing, Bitcoin floats around more than 5% over the past seven days.
Looks like the price of the coin has seen an uplift during the past day | Source: BTCUSDT on TradingView
Featured image from istock.com, glassnode dot, charts from tradingview.com
