Why is Bitcoin price stuck?

The price of Bitcoin (BTC) is stuck, fluctuating inside a narrow trading range with futures markets remaining flat nearing all-time lows. 

Why is Bitcoin price stuck?

Bitcoin price is going through an unusually calm period, with several volatility indicators reaching near-record lows. Currently, Bitcoin price is up nearly 2% hitting an intraday high of $29,735, but the upward BTC price move remains within the flat market trend where the price has been trading in the $28,670 – $31,000 range.

Let’s dig into a few reasons why Bitcoin price is stuck in its current tight range.

Bitcoin price sees record-low volatility

While Bitcoin has had similar periods of sideways trading during the 2016 and 2019 cycles, the realized volatility of 2023 has reached multi-year lows. The 1-year realized volatility metric hit levels not witnessed for Bitcoin price since December 2016.

Bitcoin price realized volatility. Source: Glassnode

Lowered realized volatility is coinciding with muted BTC futures and options trading volume. Bitcoin derivatives are not the only major crypto asset approaching all-time lows in volume. Ethereum derivatives markets fell below Jan. 2023 lows in August. With Bitcoin only seeing $19 billion in aggregate derivatives trade volume, it is nearing the Jan. 2023 low.

Bitcoin and Ether derivatives trade volume. Source: Glassnode

What’s next for Bitcoin price?

From a technical standpoint, Bitcoin’s market price is holding above multiple key long-term moving averages. The trend follows similar patterns of previous Bitcoin cycles.

Despite the current low volatility and condensed range of Bitcoin price, Conor Ryder the head of research and data at Ethena Labs does not expect it to last long. 

“Market depth for BTC is pushing yearly lows, and in periods of low liquidity, we tend to see more short-term volatility, both to the upside and the downside. As always, we have to step back and examine the bigger picture. Looking further ahead, the setup for a rally as we head into the next BTC is halving is certainly there. All the fundamentals are looking positive when examined on a longer timeframe, and coupled with the potential of a spot ETF approval, sentiment could definitely pick up. But until then, I expect there to be periods of boring market action alongside some illiquidity-induced short-term moves.”