Typically, when Bitcoin's trading range narrows it is seen as an indication that the market is feeling the pricing is in an appropriate range. This is due to the lower volume in the crypto markets, which has lead to the reduction of volatility. A decrease in the aggregate amount of stablecoins being added to exchanges also contributes to this effect. However, the current price of Bitcoin at the time of writing is only 4.5% lower than a high volume node. This shows potential for upside in the short term, and may be aided by increased agreement between buyers and sellers due to the high volume of liquidity.
On the other hand, the number of active Bitcoin addresses on the network has declined by 33% since April. This has had an influence on the reduction of volatility. However, Bitcoin's market share is actually on the rise, and it has seen a 5% growth year-to-date. This is further exemplified by Bitcoin's dominance in the cryptocurrency market - 45% of the total cryptocurrency market cap of $1.6 trillion is made up of Bitcoin.
Collectively, this shows that Bitcoin is the go-to asset for most crypto investors, and is being seen as a safe haven asset. Despite its volatility, Bitcoin remains a dominant player in the crypto world and is expected to remain at the top for much of 2021.
- Noah Davis
- 2023-05-19
What the Narrowing Trading Range of Bitcoin Means
As Bitcoin’s trading range narrows, volume in the crypto markets has decreased. Stablecoins being added to exchanges are also contributing to this effect. Bitcoin continues to be a safe haven asset, with aggressive inflows, high volume of liquidity and growing market share.