Bitcoin Stuck In Historically Tight Range, Calm Before The Storm?

Keshav Verma

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Data shows Bitcoin has been stuck in a historically tight range recently, something that could be a precursor for extreme volatility.

Bitcoin 30-Day Price Range Has Compressed To Tight Values

In a new tweet, the analytics firm Glassnode has looked into how volatile the asset has been recently. One way to quantify the volatility of Bitcoin is by taking the highest and lowest price points over a specific time period and calculating their percentage difference.

The timespan of interest in the context of the current discussion is the 30-day period, meaning that the volatility here is calculated by checking for the difference between the top and bottom registered during the last 30 days.

Naturally, whenever the value of this metric is high, it means that the cryptocurrency’s price has observed large fluctuations in the past month. On the other hand, low values imply that the asset has traded inside a narrow range.

Now, here is a chart that shows the trend in the 30-day high and low, as well as the difference between the two (that is, the 30-day range), for Bitcoin over the entire history of the coin:

The value of the metric seems to have been quite low in recent days | Source: Glassnode on Twitter

As displayed in the above graph, the Bitcoin 30-day range has had a value of 10.7% recently, meaning that the cryptocurrency’s price has fluctuated 10.7% between its top and bottom during the past month.

From the graph, it’s clearly visible that the current value of the indicator is very low when compared to the norm during the asset’s history. Interestingly, this is despite the fact that the BTC price has registered some fresh volatility recently due to FUD around Binance and Coinbase coming under regulatory pressure.

While the asset may have seen some short-term volatile price action following the emergence of this uncertainty in the market, Bitcoin has still overall only traded in a narrow range when looking at the grand scheme of things.

In the chart, the analytics firm has also highlighted the trading days that saw an even tighter 30-day range than the one being observed currently. As expected, it looks like there haven’t been that many instances where such a trend has taken place.

Curiously, following most of these occurrences, the Bitcoin price observed a burst of volatility as the narrow 30-day range decompressed. One prominent example of this would be the November 2018 crash, which was preceded by a period of the asset moving endlessly sideways inside a tight range. This crash occurred during the bear market of the previous cycle and lead to the formation of the cyclical bottom for it.

If the pattern followed by all these instances is anything to go by, Bitcoin may currently be approaching a narrow range that would only result in some extreme volatility for the asset in the near term.

BTC Price

At the time of writing, Bitcoin is trading around $25,900, down 3% in the last week.

Looks like BTC has been moving sideways since the plunge | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.