Bitcoin has seen a significant decline from its all-time high, raising signals about the possibility of a change in market conditions. While this drop seems normal in market cycles, it reflects concerns over an impending wave of volatility.
The calm before the storm
The DVOL index, which measures expectations for Bitcoin price volatility, is at historically very low levels. The market has seen lower levels than this in only 2.6% of trading days, revealing a clear state of complacency among investors and a lack of hedging.
But this calm often precedes strong shocks, as any unexpected event could trigger a sharp price movement that surprises the market.
Shifts in holder behavior
Glassnode data reveals a slowdown in the activity of long-term holders (LTHs). After they started accumulating at the beginning of the month, this buying momentum halted due to uncertainty.
Nevertheless, and despite the absence of new buying waves, the lack of selling reflects a degree of confidence, as investors prefer to wait for a clearer direction before taking action. This hints that any increase in volatility could eventually translate into an upward opportunity.
Potential scenarios for the price of Bitcoin
Positive scenario: If investors continue to hold their positions, the price of Bitcoin could remain above the $117,000 level, opening the door to test $120,000 and turning it into a new support level.
Negative scenario: If pessimism takes over and selling pressure increases, the support area of $115,000 may break, potentially pushing the price down to around $112,526, which would mean erasing August's gains and weakening the bullish outlook.
#BTC #CryptoNews #Market_Update #FutureTarding #InvestSmart