Surge of Bitcoin Volatility is Possible in the Crypto Market Soon – Glassnode

Glassnode analysts are confident that the rise in implied volatility and increased leverage in the derivatives market indicate the likelihood of the beginning of sharp fluctuations in the price of Bitcoin.

With tight range trading over the past two months, implied volatility in the Bitcoin options market has exceeded a 60%-70% price band. A similar pattern was observed on the eve of the collapse in May 2021, the liquidation of shorts in July and October. In addition, open interest (OI) reached 1.94% of the capitalization of the first cryptocurrency.

A similar picture was formed in the market of perpetual contracts — OI of 1.28% of the total market value of BTC entered the “risk zone”.

According to experts, the largest buying activity in the spot market is concentrated in the US and European markets, and the main selling pressure is formed during the daytime in Asia.

At the moment, on-chain metrics are consistent with a bear market. New Bitcoin addresses are growing at a rate of ~110,000 per day, showing a moderate increase.

The share of large transactions (for the equivalent of $1 million) also increased from the usual 50% for 2021 to the current 65%-70%. Given the decline in aggregate volume, analysts say this signals a bearish scenario.

The analysts added that long-term investors’ accumulation of bitcoin increased strongly, although during the period before the October high of bitcoin, this volume was balanced by their spending.

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