Bitcoin Chip Concentration Surges, Paving Way for Violent Price Move

Crypto analyst Murphy warns that Bitcoin's spot market is on the verge of a violent price move, driven by the increasing concentration of chips within a 5% range of the current spot price. The concentration has risen from 10% in May to its current level of 12%, which, although still below the critical point of 15%, has exceeded the threshold that triggered significant volatility last May.

Murphy points out that when chips are concentrated in a specific price range, small price changes can amplify the turnover of sensitive chips, leading to larger fluctuations. Historical data shows that concentrations above 15% indicate a higher probability of triggering major market moves, with instances reaching 18% in November 2025 and 16% in January 2026.

However, the analyst notes that after the February price drop, the prolonged low circulation and turnover reduced the prominence of chip concentration. Nevertheless, the significant volatility observed in May suggests that market sentiment has become more fragile and unstable.

Murphy believes that if Bitcoin continues to trade within its current range of $62,000 to $66,000, the concentration of chips will inevitably increase further, eventually leading to a violent breakout as overly concentrated chips are redistributed. This event may mark an important directional decision at the end of this bear market cycle.