25 February, 2024

Bitcoin Breaks Tradition: Low Volatility and Rising Value Mark New Market Trend

3 months ago

06 Dec, 2023

  • Bitcoin shows unusual stability with its 30-day intra-day move lower than traditional markets, hinting at a new market trend.
  • Surge in self-custody of Bitcoin reflects diminishing trust in exchanges amidst regulatory challenges, marking a shift in user behavior.
  • Despite regulatory hurdles and no ETF approval, Bitcoin’s resilience shines as it maintains a bullish stance, staying above $38,000.

In a remarkable shift in market dynamics, Bitcoin (BTC), the world’s most prominent cryptocurrency, is exhibiting an unusual trend. Contrary to its typical narrative of high volatility. As per IntoThe Block, Bitcoin’s 30-day average intra-day move is currently lower than that of traditional markets. 

This development indicates a period of relatively lower volatility for Bitcoin. Furthermore, in the recent 24-hour period, Bitcoin, currently trading at $38,004.79, has experienced a 2.26% surge. This uptick extends its weekly gains to nearly 4.36%.

Significantly, on-chain data reveals that a substantial amount of Bitcoin is moving off exchanges. This trend is potentially a bullish catalyst for the cryptocurrency. Reports indicate that Bitcoin exchange supply has reached its lowest level since 2017, a five-year low. 

According to the on-chain platform Santiment, this movement into self-custody signifies a waning trust in exchanges. This trend comes amidst recent challenges faced by major exchanges such as Binance and Coinbase, who have encountered significant regulatory actions and settlements.

Additionally, Tether, a stablecoin often used in cryptocurrency trading, is seeing increased holdings in the top 10 exchange wallets. These wallets now hold $15.23 billion in Tether, marking the highest level of exchange buying power in 17 months. This suggests a growing liquidity reserve that could fuel future market moves.

However, despite these promising signs, the market remains cautious. The Relative Strength Index (RSI), a key indicator of market momentum, is hovering around 60, indicating a neutral market stance. 

Similarly, the Know Sure Thing (KST) momentum oscillator shows a potential bearish signal, with the main line crossing below the signal line. These indicators suggest a market in flux, with traders watching for definitive trends.

BTC/USD 4-hour price chart, Source: TradingView

Moreover, amidst regulatory scrutiny and the absence of approval for a spot BTC Exchange-Traded Fund (ETF), Bitcoin’s resilience is noteworthy. Its price has rebounded above the $38,000 mark, reflecting a bullish stance among traders. PlanB, the creator of the stock-to-flow model, remains confident, asserting that Bitcoin’s price is unlikely to fall below $35,000 again.

Hence, the current scenario presents a complex but fascinating picture of Bitcoin’s market dynamics. While showing signs of convergence with traditional markets, Bitcoin also exhibits unique trends that set it apart. Analysts and investors alike are keenly observing these developments, as Bitcoin continues to chart its course in the ever-evolving world of cryptocurrency.