Analysis from blockchain company CryptoQuant suggests that Bitcoin's short-term price action could disappoint traders as kriptovalyuta is becoming increasingly volatile.
This week Bitcoin reached new all-time highs of around $104,000, but then fell more than 10%. In just 24 hours, liquidations approached $1 billion, giving traders another reminder of how volatile cryptocurrencies can be.
The 14-day volatility index is currently in the initial zone, showing corrective movements during consolidation, wrote one of the CryptoQuant analysts.
The Volatility Index (VI) shows that BTC/USD is currently experiencing a period of calm after a surge in volatility, the expert explains. The index uses a scale from 0 to 100, with higher values indicating “unstable” market conditions. A low value, on the other hand, indicates a trending market.
BTC/USD Daily Chart with Volatility Index
At the time of writing, the volatility index was 56,7, the highest level since mid-August 2024, according to TradingView.
The consolidation time factor should be taken into account: in the 2020/2021 cycles there were 20 days of downtime, and in the consolidation since March the average decline was ~20 days. The greater the consolidation, the greater the rise, the analysts explain.
While a prolonged period of consolidation should lead to a sharp rally in Bitcoin, the volatility index currently suggests that bulls will be disappointed in the short term due to the volatility of the flagship asset.
