Soaring Bitcoin Volatility Reaches 70% and Approaches 2023 Lows: Will History Mirror Past Trends?
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In the world of Bitcoin, the current market phase is shaping up to be a fascinating one. With the Puell Multiple declining by nearly 13% and the Network Value to Transactions (NVT) Ratio spiking to its highest reading in recent months, the cryptocurrency is exhibiting signs of a mature, steady market. This steady state could be a precursor to either a major bullish breakout or a correction.
The low volatility, a characteristic shift from Bitcoin's historically wild swings towards behaviour more aligned with traditional financial assets, is a clear indication of market maturation. This maturation, resembling Wall Street's dynamics rather than crypto's earlier "wild west" state, has been accompanied by a steady price rise from about $70,000 to over $118,000 in 2025.
However, the low volatility is not the only factor that raises eyebrows. The Puell Multiple, an indicator reflecting miner revenue, has also seen a decline, suggesting that miner revenue is falling below historical norms. This could potentially lead to reduced miner-led selling. It's worth noting that the Puell Multiple is still far above the 0.4-0.5 capitulation threshold.
The NVT Ratio, which has spiked to 412, indicates potential market overvaluation. This sharp rise implies that Bitcoin's market capitalization is outpacing the volume of on-chain transactions, signaling reduced utility relative to value. This overvaluation, coupled with the declining on-chain activity, paints a mixed picture.
On-chain activity metrics, such as Transaction Count and Network Growth, have seen a significant drop. As of press time, Transaction Count plunged to 188,000, while Network Growth dropped to just 72,100 - both multi-week lows. This downshift suggests that Bitcoin's market activity has entered a consolidation phase, with declining user participation and a cooldown in new wallet creation.
Despite these signs of market maturity and potential overvaluation, historical precedence suggests that such quiet phases often act as launchpads for major trend reversals. If volatility remains compressed and fundamentals realign, Bitcoin could be gearing up for a breakout.
At press time, Bitcoin traded at $118,922, posting a modest 0.59% daily gain. Traders and investors should keep a close eye on volatility and external macro triggers for signals of a potential major trend reversal or continuation.
[1] Data source: CoinMetrics [2] Data source: Glassnode [3] Data source: CryptoQuant [4] Data source: Blockchain.com
- However, the decline in the Puell Multiple and the spike in the NVT Ratio indicate that other cryptocurrencies, such as Ethereum (ETH), might also be exhibiting signs of a mature market.
- Some investors might be looking for alternative options in the world of finance and technology, potentially shifting their focus from Bitcoin (BTC) to other cryptocurrencies like Ethereum (ETH) or even fiat investments, based on these market indicators.
- As the technology behind Bitcoin (BTC) matures and the cryptocurrency market becomes more stable, investors might find it increasingly important to diversify their crypto wallets, potentially adding Ethereum (ETH) or other digital assets to their investment portfolios.
- The low volatility and potential overvaluation of Bitcoin (BTC) could drive more focus on initial coin offerings (ICOs) or emerging projects in the blockchain space, such as decentralized finance (DeFi) platforms, which can offer higher returns and have lower correlations with Bitcoin (BTC) and Ethereum (ETH).
