Bitcoin (BTC) Short-Term Volatility Mirrors March 2023, Signaling Market May Be Preparing for Next Rally

A widely watched Bitcoin (BTC) indicator that signals volatility on cryptocurrency exchanges is approaching its lowest point of the year, similar to what was seen before Bitcoin rallied in 2023.

A widely watched indicator that signals volatility on cryptocurrency exchanges is nearing its lowest point of the year, similar to what was seen before Bitcoin rallied in 2023.

BTC

$63,603.48

“The indicator levels are currently also low, which might be signaling the market is preparing for the next rally,” CryptoQuant contributor Axel Adler wrote in a Sept. 30 analysis.

Bitcoin short-term exchange flow multiples vs. price. Source: CryptoQuant

Adler noted that it’s “interesting” how Bitcoin’s low exchange flow multiple values were “seen before the rally in 2023.” In April 2023, BTC saw a 46% rise over the previous 30 days, reaching $30,312.

Bitcoin price volatility is decreasing

He added that Bitcoin’s short-term inflows and outflows — those held for under 30 days — are significantly lower than long-term flows, signaling “decreased volatility” in Bitcoin exchange flows. This could also suggest that Bitcoin traders are holding, expecting to benefit from a potential price increase soon.

Bitcoin is down 3.22% over the past 24 hours. Source: TradingView

Meanwhile, CryptoQuant contributor Julio Moreno noted in a Sept. 30 X post that there are “increasing short positions behind today’s decline in Bitcoin and Ethereum prices.”

“Open Interest increased as the price dropped,” Moreno wrote.

Bitcoin OI remains elevated, sparking concerns

Moreover, crypto market analyst Maartuun opined, “Bitcoin is in that funny spot where the price is down, but open interest isn't.”

“This setup warrants further fireworks,” Maartuun added.

According to CoinGlass data, Bitcoin futures open interest stood at $35.15 billion at the time of writing.

Related: New all-time high in ‘Uptober?’ 5 Things to know in Bitcoin this week

Cointelegraph recently reported an analyst’s view that there is uncertainty over the chances of Bitcoin reaching six figures by year-end. However, returning to its current all-time high remains within reach.

“The window to get to $100k by the end of the quarter looks very small to me. You would need everything to go right from this point on and you simply can’t be sure that is going to happen,” Swyftx lead crypto analyst Pav Hundal told Cointelegraph.

On Sept. 30, the price of BTC took a 3.22% hit over the past 24 hours, trading at $63,531, based on TradingView data.

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This article does not contain investment advice or recommendations. Every investment and trading move carries risk, and readers should conduct their own research when making a decision.