Bitcoin [BTC]: Analysis of the factors behind King Coin’s declining volatility

• In the last 30 days, Bitcoin volume is down almost 37%.
• $1.3 billion worth of BTC was delisted from exchanges on May 15.

Bitcoins [BTC] Volatility has once again become an interesting topic for crypto watchers. According to Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock, 60-day annual volatility for the largest digital asset on the market has fallen below 40%, the eighth such event in the past five years.

How many BTCs can you get for $1?

The analyst used historical data to show that volatility stays below stated levels for an average of five weeks before leading to a 46% price surge for BTC. While this could inspire great optimism among BTC bulls, Outumuro recalled three instances where these circumstances occurred prior to a 50 percent drop in BTC’s value.

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Bitcoin volatility has dropped to historically important levels

Annualized 60D volume value is below 40% for the eighth time in the last five years

On average, BTC volume stays below this level for 5 weeks, resulting in a 46% price increase

These conditions also preceded three 50% crashes pic.twitter.com/G4YIZLvcsQ

— Lucas (@LucasOutumuro) May 16, 2023

Trading activity is cooling off

Bitcoin’s trading ranges continued to narrow, indicating increasing market skepticism. Looking at the BTC price chart on the daily timeframe, the king coin has been fluctuating in a range of $26,600 to $27,400 over the last week.

The Bollinger Bands (BB) have been converging significantly since the high volatility period in late March.

Source: BTC/USD trade view

Additionally, Bitcoin’s trading volume has also declined significantly since March. Despite breaking through $30,000 in April, monthly volume fell to $492.2 billion, a whopping 55% drop from May’s $1.1 trillion, according to data from Token Terminal.

Over the past 30 days, volume is down nearly 37%.

Source: Token Terminal

Another factor that may have contributed to moderating volatility was the sharp drop in daily active addresses.

According to Santiment, the number of unique addresses involved in BTC transactions dropped to 811.9k on May 16. This represented a drop of almost 28% compared to the previous month.

Source: Santiment

Bitcoin exchange outflows are increasing

Among other things, falling volatility indicated that large names may be adopting a wait-and-see strategy. This could be due to the lack of clear buy and sell signals from the market.

More than 48,560 BTC coins, worth a whopping $1.3 billion, were delisted from exchanges as of May 15, according to Glassnode.

Source: Glassnode

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Most of it was pulled from Coinbase, marking the exchange’s biggest pullback of 2023 and its biggest since December.

Such large withdrawals can either be explained by a shift to a long-term holding strategy or a willingness to hold one’s money oneself.

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