Bitcoin Stuck In Tight Range: Will BTC Decompress With A Big Move?

Keshav Verma

1 year ago

3 mins read

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Data shows Bitcoin has been stuck in a historically tight 14-day range recently, something that has decompressed into big moves in the past.

Bitcoin 14-Day Range Has Been Extremely Narrow Recently

According to data from the analytics firm Glassnode, the 14-day range has only been narrower than now during less than 2% of the cryptocurrency’s entire trading life. The “14-day range” here refers to the percentage difference between the top and bottom recorded in the Bitcoin price during the past two weeks.

This indicator can tell us about how volatile the asset’s price has been recently. When its value is high, it means that the coin has observed a large amount of fluctuation within the last fourteen days, and thus, the price has registered high volatility.

On the other hand, low values of the metric imply the cryptocurrency hasn’t been that volatile as its price has moved by only a low percentage during the past couple of weeks.

Now, here is a chart that shows the trend in the Bitcoin 14-day range over the entire history of the asset:

Looks like the value of the metric has been quite low in recent days | Source: Glassnode on Twitter

As highlighted in the above graph, the Bitcoin 14-day range is currently at a value of just 4.6%, which means that the local high and low within the past two weeks have differed by just 4.6%.

This is an extremely low value when compared to what has generally been the norm for BTC. In the chart, Glassnode has also marked the instances where the indicator has observed even lower values than right now.

As can be seen from the purple bars, there have only been very few occurrences where Bitcoin has traded inside a narrower range. In terms of the numbers, only 2,176 hours in the lifetime of the asset have registered lower values of the metric, which are equivalent to about 1.9% of the entire trading life of the oldest cryptocurrency.

An interesting pattern has historically followed whenever the indicator has recorded such low values of the 14-day range. From the graph, it’s visible that Bitcoin has usually succeeded in these periods of extremely low volatility with a violent move.

This violent move can be towards either direction, as both crashes and rallies have followed a narrow range. Though, curiously, the majority of these moves have been towards the upside.

The latest occurrence of this pattern was way back in January, right before the current rally initially started. It would appear that back then as well, the tight range exploded into a sharp upwards move.

If history is anything to go by, the current low values of the 14-day range may mean that another sharp Bitcoin move may be likely to take place in the near future. And naturally, if precedence is to consider, such a move may be more probable to be towards the up direction.

BTC Price

At the time of writing, Bitcoin is trading around $30,900, up 1% in the last week.

BTC appears to be surging | Source: BTCUSD on TradingView

Featured image from André François McKenzie on Unsplash.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.

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