Bitcoin's Calm May Mask Volatility Explosion

Bitcoin's price has been stuck in a tight range for several months, with volatility at six-month lows. The largest cryptocurrency is currently trading around $63,671.54, mirroring its behavior from seven months ago.

Back in January, Bitcoin was stuck between $86,000-$90,000 since the second half of December. Trading volume had dropped to an average of $5.1 billion a day and has fallen to $2.2 billion this month, according to research from K33.

The market's calm may be deceptive, as history suggests that long stretches of quiet price action often precede a sharp move in one direction or the other. Volatility is cyclical, with the tighter the market compresses, the more forcefully it can unwind.