Bitcoin Enters Crucial Phase, Poised for Major Gains

Bitcoin is now at a critical juncture, with many analysts predicting massive returns this year as BTC prepares to enter uncharted territory once again.

Bitcoin price has been a hot topic lately, and for good reason. After a stellar 2020, many predicted that BTC would continue to surge this year, and so far, it has largely lived up to those expectations.

But as we approach the final quarter of 2021, some are wondering whether Bitcoin is nearing a cycle top or if the real rally is just beginning. To help answer this question, we turn to on-chain metrics, which provide valuable insights into the health and direction of the Bitcoin market.

One key metric is realized volatility, which measures the standard deviation of logarithmic returns over a specific time frame. This metric helps us understand how volatile an asset has been recently, which can be crucial in a market like Bitcoin, where large price swings are common.

According to data from CryptoQuant, BTC’s monthly realized volatility currently stands at 11%. For comparison, during the previous bull market cycles, realized volatility reached peaks of 16% and 14%. This lower volatility could indicate that Bitcoin is still gearing up for its next major move.

Historically, in the final year of the halving cycle, bull markets tend to accelerate aggressively. As we approach the final months of this cycle, Bitcoin's price action and on-chain trends will be closely watched to determine the market's next phase. In the coming weeks, many will be watching the $110K level, which could trigger significant buying if breached.

Meanwhile, long-term holders continue to accumulate BTC, with on-chain data showing a persistent flow of Bitcoin leaving exchanges, which reduces the available supply. If history repeats itself, BTC could be on the verge of a parabolic rally, driving the crypto market to new all-time highs.