Bitcoin\u2019s\u00a0volatility has dropped to historically low levels thanks to macroeconomic uncertainty and low market liquidity<\/a>. However, on-chain and options market data allude to incoming volatility in June.<\/p>\n The Bitcoin Volatility Index, which measures the daily fluctuations in Bitcoin\u2019s (BTC<\/a>)\u00a0price, shows that the 30-day volatility in Bitcoin\u2019s price was 1.52%, which is less than half of the yearly averages across Bitcoin\u2019s history, with values usually above 4%. <\/p>\n According to Glassnode, the expectation of volatility is a \u201clogical conclusion\u201d based on the fact that low volatility levels were only seen for 19.3% of Bitcoin\u2019s price history. <\/p>\n The latest weekly update<\/a> from the on-chain analytics firm shows that Glassnode\u2019s monthly realized volatility metric for Bitcoin slipped below the lower bounds of the historical Bollinger Band, suggesting an incoming uptick in volatility.<\/p>\n The on-chain transfer volumes of Bitcoin across cryptocurrency exchanges dropped to historically low levels. The price is also trading near short-term holder bias, indicating a \u201cbalanced position of profit and loss for new investors\u201d that bought coins during and after the 2021-2022 bull cycle, according to the report. Currently, 50% of new investors are in profit, with the rest in loss.<\/p>\n However, while the short-term holders reached equilibrium levels, long-term holders were seen making a move in the <\/a>recent correction<\/a>, which underpins volatility, according to the analysts. <\/p>\n Glassnode categorizes coins older than 155 days in a single wallet under long-term holder supply.<\/p>\n The gray bars in the image below show the long-term holder (LTH) binary spending indicator, which tracks whether LTH spending averaged over the last seven days is adequate to decrease their total holdings.<\/p>\n It shows previous instances when LTH spending increased, which was usually followed by a volatility uptick.<\/p>\n Bitcoin\u2019s recent correction saw a minor downtick in the indicator, \u201csuggesting 4-of-7 days experienced a net divestment by LTHs, which is a level similar to exit liquidity events seen YTD.\u201d <\/p>\n The analysts expect a bout of volatility to reach an equilibrium level, where the market moves primarily due to the accumulation or distribution of long-term holder supply.<\/p>\n The options market data indicates a similar theory about impending volatility. <\/p>\n The latest options market expiry<\/a> for May turned out to be a dull event, despite a major expiration of $2.3 billion in notional value. However, prolonged compression of volatility can indicate a big incoming move in terms of price. <\/p>\n Bitfinex\u2019s latest Alpha report shows that the DVOL index, which represents the market\u2019s expectation of 30-day future implied Bitcoin volatility, slipped to 45 from a reading of 50 right before the expiry, which represents a yearly low. <\/p>\n Implied volatility in options refers to the market\u2019s expectation of the future volatility of the underlying asset, as reflected in the prices of options. <\/p>\n![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-05\/b6180a81-4723-4d5c-9de1-ed0db28cbe14.JPG\" "\\"\\"")
Long-term Bitcoin holders metric points to a price breakout <\/h2>\n
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Options markets reaffirm traders\u2019 expectation of volatility <\/h2>\n
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