Bitcoin, the first and largest cryptocurrency by market capitalization, has been consolidating for weeks and is trading within a relatively stable range of $93,000-$98,000.
Bitcoin sought to rise over its current all-time high of $109,114, reached Jan. 20, 2025, and return to price discovery. This rally, however, did not gain the requisite momentum. Following Bitcoin’s second attempt to break above $105,000 in late January, the market has entered a phase of contraction and consolidation, with price momentum falling substantially across key assets.
Amid the ongoing consolidation, Bitcoin’s one-week realized volatility has fallen to 23.42%, approaching historical lows, according to a recent Glassnode tweet. It has only slipped lower a few times during the last four years, most recently in October 2024 and November 2023, when it fell to 22.88% and 21.35%, respectively. Glassnode highlighted that similar compressions in the past led to major market moves.
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Similarly, BTC’s one-week options implied volatility has fallen to 37.39%, a multi-year low. The last time IV was this low (2023, early 2024), major volatility spikes occurred. Meanwhile, long-term IV stays greater (three months at 53.1%; six months at 56.25%).
Potential scenarios
According to Glassnode, Bitcoin is approaching a decisive moment in the market — a phase where price action is primed for uncoiling. If demand remains strong, Bitcoin could establish a new range above its ATH of $109,114.
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However, a lack of sustained buy pressure may result in a deeper distribution-driven correction, similar to prior post-ATH phases. This would most likely be triggered by fear among recent buyers who see their newly acquired coins go from profitable to unrealized losses.
At the time of writing, Bitcoin was up 1.49% in the last 24 hours to $98,915 after reaching an intraday high of $98,980. Bitcoin is currently confronting the short-term barrier at $99,067, which coincides with the daily SMA 50.
Bitcoin must break through this level to exit its current trading range and return to the $100,000 mark.
On the other hand, a massive demand zone has formed just below the current price. According to IntoTheBlock, 2.76 million addresses bought a total of 2.1 million BTC at an average price of $97,100, indicating significant buying interest at this level. If the market faces further downward pressure, this zone may act as robust support.
