Bitcoin Volatility Remains Low as Supply Nears Critical Profit Threshold

Bitcoin's volatility remains at historically low levels, according to Glassnode analysis. Long-term holder supply is identified as the strongest factor driving changes in one-month realized volatility. The firm found that illiquid supply and liveliness of the market are also contributing factors, while market cap ranks much lower.

In a separate report, Bitfinex analysts note that more than 71% of Bitcoin's supply is currently in profit. This figure approaches the historical mean of 74.7%, which has often marked the transition from bear to bull markets when surpassed.

The analysts also highlight that identical nominal price levels now trigger a greater volume of profitable coins, creating a deeper pool of latent sell-side liquidity whenever the market tests previous highs.

Additionally, crypto market capitalization excluding Bitcoin, Ethereum, and stablecoins has increased by $51.2 billion since September 1st, moving above levels seen in mid-August. This growth is attributed to continued ETF inflows and stablecoin expansion.