Although Bitcoin is known for its volatile price action, the world’s largest cryptocurrency is now showing remarkable stability.
Well-known cryptocurrency expert James Check, known as @Checkmatey on social media, recently highlighted that the spread between Bitcoin’s upper and lower Bollinger bands is just 2.9%.
Leading Glassnode on-chain analyst noted that such a limited range of Bitcoin’s Bollinger Bands has only occurred twice before: once in September 2016 and again in January 2023.
For those unfamiliar with the term, Bollinger Bands are a technical analysis tool used to measure price volatility. As is currently the case, the closer these bands are to each other, indicating periods of lower volatility.
Data from CoinGecko supports the analysts’ observations, showing that Bitcoin has had a very limited 24-hour trading range of $29,143.57 to $29,445.38. Despite the smaller swings, its market cap is still hovering around $29,413, with a market cap of around $572.3 billion.
Bitcoin’s unusual stability
Historically, this period of lower volatility has been an anomaly for Bitcoin. As Check points out, the current market’s options pricing even has an extremely low volatility premium, which highlights the uniqueness of this situation.
According to USA Today, Bitcoin trading volume also hit its lowest level since November 2020, and volatility also dropped significantly, even surpassing the stability of the S&P 500, technology stocks and gold.
Despite potential positive developments like a possible Bitcoin ETF, large investors remain hesitant to re-enter the cryptocurrency market, but a major announcement could spark an influx of activity.