Bitcoin (BTC) remains within the sideways range it has been in for just over 5 months. However, there are signs in the market that a period of greater volatility may be triggered, as it is currently trading around $60,000 (USD). “The market has remained within a structurally ordered downtrend for over 5 months as a period of consolidation and accumulation takes place,” warns the analysis firm Glassnode. In a new report on the subject, it clarifies that This has historically triggered high price volatility.. “Periods of quiet and calm in the market structure are short-lived and often precede an expectation of greater volatility,” the firm elaborates. In this sense, it would not be surprising to see larger fluctuations in the short term. In recent months, net capital inflows into bitcoin have begun to slow down. In fact, 89% of days in bull markets have seen levels higher than the previous weekthe firm says. “Similar periods of inactivity tend to precede a significant increase in volatility in the future,” it mentions. In addition, there has been a reduction in liquidation volumes in bitcoin futures in recent months, to levels not seen since February 2022. “This reflects that the appetite for speculation has decreased and suggests a more spot-dominated market regime for the time being,” explains Glassnode.
Relationship between volatility and settlements of perpetual futures. Source: Glassnode. “If we compare monthly price volatility with net settlement volumes, we can see a strong correlation between the two factors,” he points out. He also stresses that this phenomenon is amplified by the return of neutrality in funding rates in digital assets, which show market sentiment. With this panorama, Glassnode summarizes that There is a significant decrease in speculation among market investorsregardless of the instrument, may be about to bounce back. Meanwhile, the price of bitcoin remains around $60,000 (USD), which is 17% below its all-time high recorded in March, as seen below.
Bitcoin price over the past few months. Source: TradingView.
Upcoming economic and political moves could accelerate bitcoin volatility
As reported by BitcoinDynamic, Technical analysis of the Bitcoin price chart shows similar behavior in 2024 to the previous yearbut with a month's notice. In this sense, if this pattern continues, the currency would break the lateral trend maintained for months in September. The expected cut in interest rates in the United States for September motivates the possibility of greater demand for the market. However, specialists such as the investment firm QCP Capital consider that this monetary policy could already be discounted. For QCP Capital, the American elections scheduled for November, in the middle of the autumn of the northern hemisphere that is usually bullish, can take BTC to new all-time highsOne reason for this is that a win by Republican candidate Donald Trump, who identifies himself as a supporter of the currency, could boost demand.