Bitcoin (BTC) surpassed $126,000 for the first time in history on Tuesday. But a rapid pullback of about 4% followed soon after. Despite the short-term pullback, broader trends point to a historic stagnation in activity.
The asset’s long-term volatility has fallen to record lows, meaning Bitcoin is entering one of its most benign phases to date. Such patterns have often been seen before large price movements in the past.
BTC has not reached the top of the cycle yet.
Bitcoin’s 180-day volatility has fallen to its lowest level in history, according to Al-Ractal. This indicator tracks the standard deviation of daily return fluctuations, indicating that traders are witnessing historic stability. The analytics platform explained that such low volatility often precedes large price movements.
Cryptocurrency analysts on Wall Street also believe that Bitcoin is gearing up for its next big rally after briefly pulling back from recent all-time highs. After a 16% jump from $108,000 to $126,000 in just 10 days, he argues that Bitcoin is consolidating rather than hitting a plateau. Contrary to bearish calls for a cycle peak, he sees this stage as a preparation for another surge in price discovery.
A key factor, he said, is the continued accumulation by large institutional investors like BlackRock, which reportedly bought $1.2 billion of Bitcoin on Tuesday and $3.3 billion the week before. Wall Street argues that such large purchases will intensify and eventually absorb liquidity and force short sellers to capitulate.
Technically, we expect a retest of the 4-hour EMA200 before a definitive breakout, which is expected to mirror the pattern seen before the $110,000 rally. On the macro front, he pointed to weak US economic data and the increasingly dovish stance of the Federal Reserve as factors driving the dollar’s weakness. He believes this factor will push Bitcoin further.
the bear retreats rapidly
It has been pointed out that selling pressure is rapidly weakening in the Bitcoin derivatives market as well.
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Net taker volume, a measure that compares the size of buy and sell orders across derivatives platforms, has rebounded from a “very low” level of -$400 million to neutral range.
Therefore, this shift is considered a significant shift in trader behavior, suggesting that bearish sentiment is fading after several months of dominance. This recovery in net taker volume previously coincided with a phase in which BTC price action received stronger support from derivatives activity.
A similar situation was observed after the April correction, leading to renewed bullish momentum. The medium-term outlook for the market now appears to be stabilizing as buying and selling forces have reached equilibrium.
