Despite its reputation as a volatile asset with significant price fluctuations, bitcoin has been experiencing a narrow range in the past few days.
However, this could change in the coming days, as historical trends have suggested.
- Aside from May 12’s price plummet to a two-month low, BTC’s recent performance has been relatively unremarkable.
- Last week, the asset reached a high of $27,600 before dropping by $1,000, the most significant price movement in the past ten days or so.
- Unsurprisingly, the cryptocurrency’s 7-day price range has hit rare territory. Glassnode recently reported that this metric is now at 3.4%, which is “one of the tightest of the last 3 years.”
- Although rare, this occurrence is not unprecedented. The analytics firm provided a few examples, including one in July 2020 and another in January 2023, both of which were followed by significant price movements.
- After the stagnation in July 2020, bitcoin embarked on a massive run that resulted in breaking the previous all-time high and setting a new one several months later. In following the January 2023 example, BTC experienced another price surge, albeit in a more modest way.
- Another similar scenario occurred in late 2021 and early 2022, although it was followed by a major price retracement that pushed BTC from its ATH of $69,000 to under $30,000 in just a few months.
- Given these historical trends, Glassnode suggests that BTC is likely to experience more volatility in the future, but it cannot predict whether it will be an increase or decrease in value.
The 7-day price range (3.4%) #Bitcoin has consolidated within is one of the tightest over the last 3yrs.
It is comparable to Jan 2023, and July 2020, both of which preceded large market moves.
This suggests high volatility is likely on the horizon.
— glassnode (@glassnode) May 22, 2023
