Bitcoin Volatility Reached a Peak After 2022

An important development is taking place in the price of Bitcoin (BTC). According to Binance data, Bitcoin has recently reached the highest short-term volatility level since 2022, indicating that it could enter a new phase in the market. This period, critical for investors, marks a time that requires careful monitoring regarding the future price movements of Bitcoin.

The current Bitcoin price is trading around $70,000, while the 7-day annualized volatility rate is approaching 1.51. This rate was last observed in 2022, a period during which the market experienced significant structural breaks and widespread liquidations. The current situation suggests that Bitcoin's price may revert to a more aggressive pricing phase.

On the other hand, the 30-day volatility is at 0.81, and the 90-day volatility is at 0.56. The decrease in ratios as the time frame extends indicates that the recent sharp movements have not yet turned into a permanent volatility regime. This situation suggests that while there is short-term tightening, a trend is maintained without creating panic in the long term.

Additionally, another noteworthy indicator is the ATR (Average True Range) ratio. ATR is used as a metric to measure the average daily price movement range. The current ATR value at 0.075% indicates that Bitcoin's daily price range is narrower compared to previous panic or strong rally periods. This suggests that there is not yet an uncontrolled distribution in the market, but it reveals an increase in compression.

Historically, periods of low bands but increasing short-term volatility are often seen before strong and directional movements. This raises the question among investors about whether Bitcoin's next major move will be upward or downward. As a result, uncertainty regarding the direction of Bitcoin continues, and this has heightened tensions in the market.