BTC’s price could move in either direction and this is the rationale behind it

BTC’s price could move in either direction and this is the rationale behind it

January 10, 2023

By Abiodun Oladokun

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BTC commenced 2023 with an extremely low realized volatility.
On-chain activity revealed weakness on the BTC network

BTC commenced 2023 with an extremely low realized volatility.
On-chain activity revealed weakness on the BTC network.

According to a new report by on-chain data provider Glassnode, leading coin Bitcoin [BTC] kicked off the 2023 trading year with an extremely low realized volatility.

Realized volatility is a measure of the volatility of a cryptocurrency asset based on historical prices. The metric is deployed toward determining the extent to which the price of an asset has fluctuated over a specified period.

Low realized volatility suggests a relatively stable market and can be an indication that investors have a higher degree of certainty about the value of an asset.

According to Glassnode, in previous cycles, extremely low realized volatility of BTC’s price triggered explosive movements in both bullish and bearish directions.

For example, in November 2018, the severe decline in BTC’s realized volatility immediately preceded a 50% price drawdown in under 30 days. Whereas, in April 2019, the low realized volatility led to “a rally from $4.2k to a peak of $14k in July 2019,” Glassnode found.

BTC is unwell, on-chain data suggests

In the wake of FTX’s collapse last November, BTC saw a surge in new addresses as many took advantage of the price decline to “buy the dip.” However, Glassnode found that the count of BTC new addresses has “since cooled off noticeably.”