Recent analysis suggests that Bitcoin (BTC)'s upward trend is entering a different phase. Chris Kuiper, Vice President of Research at Fidelity Digital Assets, assessed that Bitcoin is currently showing a unique trend of maintaining its upward momentum amid extremely low volatility.
Kuiper analyzed that "the current Bitcoin market is like a spring that has lost its elasticity." This implies that after long-term suppressed volatility, a sharp price movement could occur. However, he also presented another possibility: this rally might be showing a stable upward trend rather than a short-term surge, potentially entering a new market environment with low volatility. This is in stark contrast to Bitcoin's historical patterns, showing a significant difference from previous bull markets.
Actual data supports this view. According to the chart shared by Kuiper, Bitcoin's 30-day volatility index dramatically dropped from over 60% in March to around 20% in August. On-chain analysis firm Glassnode warned that the historically low implied volatility in the options market could be a harbinger of a major movement.
Amid this quiet upward trend, a sudden drop also occurred. After reaching an all-time high of $124,517, Bitcoin quickly fell below $118,000 within a day. This happened shortly after US Treasury Secretary Scott Bessent stated that there are no plans to purchase Bitcoin as a government strategic asset.
Additionally, US wholesale prices showed stronger-than-expected performance, causing expectations of Federal Reserve rate cuts to recede and increasing selling pressure across risk assets. Not only Bitcoin, but also Nasdaq, tech stocks, and major cryptocurrencies simultaneously showed weakness, with interest rate policy uncertainty affecting the overall market.
Recently, there are views that the macro structure of the Bitcoin market is changing with increased participation from institutional finance. Kristoph Jeffers, COO of 3J Partners, diagnosed that "ETF and institutional demand have notably reduced Bitcoin's volatility".
Bitcoin's new market structure and unexpected stability are expected to be crucial variables for future price movements. Experts believe the nature of the next rally will largely depend on whether a trend reversal occurs in the coming weeks.
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