Fundstrat warning: Historical medians suggest that Bitcoin could see around 30% absolute volatility over the next 60 days.

Written by Billy Bambrough, Forbes

Compiled by AididiaoJP, Foresight News

Since June of this year, the Bitcoin market has been stuck in a rare period of sideways consolidation. Prices have been churning within a relatively narrow range, and volatility has fallen to historical lows. While market participants broadly expect a so-called "ultimate catalyst" to break the stalemate, macroeconomic uncertainty is intensifying market anxiety.

At present, the price of Bitcoin is down about half from its all-time high set in October 2025. Even though Robert Michnick, head of digital assets at BlackRock, recently expressed optimism—saying market sentiment has shifted toward a "subtly but clearly positive" direction—and reiterated the pattern that after five full bull-and-bear cycles, Bitcoin ultimately ends up at higher prices, the price has still failed to effectively break out of its current range.

Notably, BlackRock’s Bitcoin ETF (IBIT) holdings are approaching 750,000 BTC, worth about $50 billion, while U.S. spot Bitcoin ETFs saw total net inflows of over $850 million last week, marking the best weekly performance since mid-April. However, many positive signals have yet to translate into real upward momentum.

The core factor that truly shifts market sentiment from “calm” to “tight” lies in two sets of macro variables that move in different directions but heat up at the same time.

First, the U.S. fiscal deficit continues to expand; the $1.8 trillion gap is reinforcing the market’s expectations for “money supply expansion.”

The latest data from the U.S. Department of the Treasury shows that the federal budget deficit in July totaled $432 billion for the month, the largest monthly gap since March 2021. This has driven the cumulative FY2026 deficit to rise to $1.8 trillion, second only to the extreme peak recorded during the COVID-19 period in 2020. Total federal debt has also edged close to $40 trillion.

Against this backdrop, many investors in crypto believe that if government spending far exceeds revenue, it can only rely on debt issuance; if the private sector lacks sufficient capacity to absorb it, it may ultimately force the Fed to restart balance-sheet expansion.

A well-known investor in the crypto space, Anthony Pompliano, said in an interview with Fox Business that disorder in government fiscal management would force the money supply to be increased continuously, while assets such as Bitcoin, gold, real estate, and stocks would benefit in the long run from the trend of fiat currency depreciation. He even predicted that Bitcoin’s average annual gains over the next 20-plus years could remain at roughly the 30% level.

BitMEX founder Arthur Hayes also pointed out in a recent analysis that the stronger the pace of monetary expansion, the more firmly the foundation is laid for the upward shift in Bitcoin’s valuation center of gravity. He also said he is increasing allocations to Bitcoin, physical gold, and gold-mining stocks.

Second, the bond market is sending sharply opposite risk signals.

This week, global bond yields surged significantly. In the U.S., the 30-year Treasury yield climbed to its highest level since 2002; the 20-year yield hit a new high since 2006, and the benchmark 10-year yield also reached a peak since 2007.

Traders generally attribute the upward move in this round of returns to a combination of factors, including the continued widening of the fiscal deficit, rising financing demand driven by investment in AI infrastructure, international oil prices staying elevated, and uncertainty in the monetary policy path triggered by the new Federal Reserve chair, Kevin Wosh.

Sean Farrell, head of digital asset strategy at Fundstrat, said Bitcoin’s 30-day realized volatility has fallen into one of the historical low ranges. He looked at the eight times in the past with similar extreme low-volatility conditions and found that the median magnitude of absolute price movement of Bitcoin over the subsequent 60 days was 30.2%. Up and down occurred four times each, suggesting that this indicator only signals the intensity of volatility, not the direction.

Based on the current price of around $64,000, a 30% increase could push it to around $83,200, while a decline of the same magnitude could see it fall back to about $44,800.

Farrell Specially emphasized that part of the recent Bitcoin rebound comes from short-covering rather than large-scale inflows of incremental capital; since the evening of last Friday, open interest in Bitcoin-denominated futures has decreased by about 8%. He explicitly identifies “the sustained rise in real bond yields” as the key variable that could break the current low-volatility regime.

Yardeni Research’s strategy team also said in its report that although the panic mechanism has not yet been triggered, it is closely monitoring whether bond-market participants will take substantive action. It believes U.S. Treasury yields are still within the usual 4% to 5% range, but they have edged up toward the upper end, warranting high vigilance.

So-called “bond vigilantes”—market forces that sell Treasuries and push up yields to pressure governments or central banks to adjust policy—once they start to act, overvalued risk assets are usually the first to be hit.

The continued rise in bond yields has significantly shifted the focus of the crypto market. Currently, traders’ attention to the Treasury market has surpassed their assessment of the Fed’s short-term rate path.

A analyst at the crypto trading platform Bitunix said the market’s main concern is no longer limited to whether the Fed will raise or cut rates. It is increasingly focused on whether long-term Treasury yields will continue rising, whether geopolitical risk will evolve into a persistent energy supply shock, whether inflation pressure is returning, and whether global risk premia will widen further.

If the 30-year Treasury yield stays at elevated levels while energy prices rise due to geopolitical tensions, stocks, crypto, and other overvalued assets may face systemic pressure.

Under this two-way risk setup, market participants are gradually preparing themselves psychologically for a potential deep pullback.

Robin Singer, CEO of crypto tax services firm Koinly, said that with U.S. midterm elections approaching, it is not unthinkable for Bitcoin to experience another sharp plunge, and a pullback to the $55,000 range is also a reasonable scenario. He believes, based on historical experience, that markets often need to go through a complete cleansing cycle—namely, the selling that leads the final batch of long positions to completely give up—before the cycle bottom can be confirmed.

In summary, on the one hand, the monetary expansion narrative sparked by massive fiscal deficits provides Bitcoin with medium- to long-term upward momentum; on the other hand, the sharp surge in bond yields—reflecting a rise in real funding costs—serves as a substantial drag on risk assets.

The current Bitcoin market shows a “seller exhaustion, buyer wait-and-see” setup, while leveraged funds have already positioned for a rebound in advance; the market’s internal structure itself is therefore highly unstable. Historical data suggest that the probability of absolute volatility at around a 30% level over the next 60 days is significantly higher. Regardless of the eventual direction, market participants need to remain highly alert and prepare for corresponding risk management.