Bitcoin Volatility Reaches Pre-Bull Breakout Levels

Bitcoin has bounced back from the high around $30K, and trends are heading to the upside of its current range. The first cryptocurrency by market capitalization managed to track its weekend losses and return to the $40,000 area.

Related reading | TA: Bitcoin Recovers Its Losses But Here’s Why $41.5K Can Block Gains

At the time of writing, Bitcoin is trading at $41,600 with a gain of 6% and 5% in the last 24 hours and 7 days, respectively.

BTC is moving sideways on the 4 hour chart. source: BTCUSD TradingView

The general sentiment in the market appears to be optimistic as the bitcoin price was able to fend off a fresh bear attack and prevent further losses. The $38,000 to $39,000 area was filled with bids, as reported by NewsBTC yesterday, which proved to be a critical area for a rebound.

The current price action appears to be heading upwards in volatility after a long period of stagnation in the bitcoin price. As seen below, data from Arcane Research indicates that lower levels of volatility could lead to Bitcoin fermenting a new high or resuming its previous highs.

The research firm notes that Bitcoin’s 30-day volatility is at a multi-year low. The last time this metric stood at its current levels was in November 2020.

At the time, Bitcoin exited a bearish market price movement from $3,000 to $16,000 into uncharted territory. The drop in volatility seems to have hinted at this price action and could be an indication of the future performance of BTC as it bounces back to $40,000.

Arcane Research notes the following regarding BTC’s volatility and why it indicates more market activity:

The lackluster Bitcoin price action over the last month has sent Bitcoin fluctuating for 30 days to reach its lowest level since November 5.y2020, Saturday 16 Aprily. The fall 2020 low volatility regime lasted for about three months from late September through early November, but such a long period of low volatility is unusual.

Source: Arcane Research

Bitcoin whales are pushing the price out of their range

Separate data from Material Indicators (MI) Indicates Increase in short-term activity from major bitcoin investors. As shown below, investors with buy orders around $100,000 (purple), $10,000 (red) and $1,000 (green) are buying in the current price action of BTC.

Major investors are buying into the current price action of BTC. Source: Material Indicators

Retail investors and “huge” Bitcoin whales are in hibernation. In total, other investor classes have been buying up to $60 million in BTC over the past day.

$39,000 and $38,000 continue to show significant support for the bitcoin price in the event of a potential downside. To the upside, $45,000 and $48,000 are the most important resistance levels for BTC with more than $10 million in bids at these two levels alone.

Related reading | Now or never: Bitcoin bases its long-decade parabola curve

Could BTC whales push cryptocurrency as high as $60,000 and into uncharted territory as it did in November 2020? Time will tell. It appears that the overall conditions are not favorable for a new recovery.

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