Bitcoin (BTC) Has Recently Been Trading Inside a Historically Narrow 60-Day Price Range. Here’s What Usually Follows Such Periods of Compressed Volatility

In a new post on X, the on-chain analytics firm Glassnode has discussed how BTC hasn’t witnessed much sharp price action recently.

Bitcoin has seen very little price action lately, but that could be about to change.

According to a recent post on X, the on-chain analytics firm Glassnode has observed that BTC hasn’t seen much movement in either direction recently. The below chart from the analytics firm shows the historical instances where the 60-day price range was narrower than the current one (in terms of percentage swing).

From the graph, it’s clear that there have only been a handful of periods where the asset traded between a narrower range during a 60-day period than the last two months. This highlights just how tight the price action has been for Bitcoin.

Interestingly, the instances with a more compressed price range all led to particularly volatile periods for the asset. Thus, it’s possible that the latest stale period might also end up unwinding with a really sharp swing in the cryptocurrency.

The volatility decompression after a narrow range hasn’t always been bullish; however, the famous November 2019 crash, which marked the bottom of that cycle’s bear market, occurred after historically stale action in the coin’s price.

The tight price range isn’t the only indication that Bitcoin could be due for volatility in the near future, as Glassnode has pointed out that a large percentage of the BTC supply is concentrated around the current price level.

The above chart shows the data for the “Realized Supply Density,” which is an on-chain metric that tells us about the percentage of the asset’s supply that was last purchased within a given range surrounding the current spot Bitcoin price.

In the graph, the analytics firm has chosen 15% as the range, meaning that the indicator is displaying the amount of the supply that was last transferred between +15% and -15% from the latest price.

The Realized Supply Density for this price range has historically followed a curious pattern: a gradual ascent in its value corresponded to a “volatility building” phase for BTC and a subsequent sharp decline to a “volatility release” one.

Recently, Bitcoin has been in the former phase from the perspective of this indicator. Around 20% of the BTC supply is concentrated in the ±15% range right now, which is a high value. “This creates the potential for amplified market volatility as investor profitability shifts,” notes Glassnode.

BTC Price

At the time of writing, Bitcoin is trading around $105,700, having appreciated by more than 5% over the last seven days.