Period of high volatility may be coming for Bitcoin

Bitcoin (BTC) has been oscillating in a sideways range for more than five months, without major price movements. Currently, the cryptocurrency is trading at around US$ 60 thousand. However, signs in the market indicate that this period of apparent tranquility may be coming to an end.

Blockchain analytics firm Glassnode warns of a possible increase in Bitcoin price volatility in the coming weeks.

In a recent report, Glassnode highlights that the market has been in a structural downtrend, characterized by a period of consolidation and accumulation. This calm in the market, according to the company, historically precedes phases of high volatility.

“Periods of quiet and calm in the market structure are short-lived and often precede an expectation of greater volatility,” explains the company.

One indicator that reinforces this analysis is the slowdown in net capital flows into Bitcoin. In recent months, 89% of bull market days have seen higher levels of inflows than last week, indicating a weakening in activity.

Additionally, Bitcoin futures settlement volumes have fallen to levels not seen since February 2022. This reflects a decrease in appetite for speculation and a more spot-focused market, according to Glassnode.

Bitcoin Analysis

The relationship between volatility and liquidations in perpetual futures is also a factor to watch. Glassnode points to a strong correlation between monthly price volatility and net liquidation volumes. This suggests that the market may be about to enter a period of increased price volatility.

This scenario is further amplified by the return to neutrality in digital asset funding rates. This context suggests a market sentiment that could trigger significant changes.

In addition, another point of attention is the technical behavior of the Bitcoin price chart in 2024, which, according to analysis, resembles that of the previous year, but one month in advance.

If this pattern continues, the cryptocurrency is expected to break the sideways trend in September, driven by economic and political movements, such as the expected interest rate cut in the United States and the presidential elections in November.

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