Emily Walker
Bitcoin has recently been experiencing a historically tight 60-day price range, and here’s what typically happens following such condensed periods of price stability.
Bitcoin’s Price Stability and Limited Supply
The on-chain analytics firm Glassnode commented on Bitcoin’s recent lack of significant price movements in a new update on X. They shared a chart showing previous instances where the 60-day price movement was narrower than the current period.
The chart illustrates that there have been very few occurrences of Bitcoin trading within such a tight range during a 60-day timeframe. This indicates the significant constraint on Bitcoin’s price action recently.
Notably, previous instances of compressed price ranges have often been followed by periods of increased volatility. Thus, the current stagnant phase could potentially precede a sharp price movement in Bitcoin.
It’s important to note that this decline in volatility hasn’t always led to positive movements; for example, the infamous crash in November 2019 marked a low point in the bear market but followed a similar period of price inactivity.
Besides the tight price range, another sign pointing to potential future volatility is the concentration of Bitcoin supply at current price levels, as highlighted by Glassnode.
The chart above illustrates “Realized Supply Density,” an on-chain metric that indicates the percentage of Bitcoin’s supply last traded within a specific range around the present price. The analysis focuses on a ±15% range relative to the latest price.
This metric traditionally follows a predictable trend: a rise in Realized Supply Density often coincides with a buildup of volatility in Bitcoin, followed by a swift decline during a volatility release phase.
Currently, Bitcoin is experiencing the initial phase, with about 20% of the total supply within the ±15% range. Glassnode notes, “This creates the potential for significant market volatility as investor profit margins fluctuate.”
Current Bitcoin Price
As of now, Bitcoin is trading at approximately $105,700, reflecting an increase of over 5% in the past week.