Bitcoin (BTC) currently trades within a historically narrow 60-day price range, a phenomenon often seen before significant market volatility. According to a new report by Glassnode, this compression in price action suggests the crypto market may be preparing for its next big move.

The report analyzed the percent range between the highest and lowest price ticks over the last 60 days, identifying this as one of the tightest trading ranges on record. 

Historically, such instances have preceded early bull market rallies or late-stage capitulations in bear cycles. This behavior is often linked to a higher cost of redistributing Bitcoin’s circulating supply, setting the stage for heightened market activity.

Imminent volatility

Key on-chain metrics are reinforcing expectations of upcoming volatility. One such indicator, the Realized Supply Density, measures the concentration of Bitcoin’s supply around the current spot price within a ±15% price range. 

Currently, 20% of the circulating supply resides within this band, highlighting the potential for significant price sensitivity as small movements could impact investor profitability and amplify volatility.

The Sell-Side Risk Ratio, which tracks realized profit and loss volumes relative to Bitcoin’s total market value, further supports this outlook. 

A sharp decline in sell-side risk has been observed in recent weeks, indicating a reduction in investor profit-taking activity. This suggests the market is nearing a local equilibrium, often a precursor to volatility as the balance between supply and demand shifts.

Profit-taking and market equilibrium

Profit-taking activity has markedly decreased since Bitcoin’s peak of $100,000 in December 2024. Glassnode reported that profit-taking volumes, which reached $4.5 billion in December, have now declined to $316.7 million, a 93% drop. 

This reduction in sell-side pressure has been accompanied by a slowdown in net capital inflows, allowing the market to consolidate and adjust to the new price range.

Despite this decline, the Realized Cap, a measure of the total value of all coins based on their most recent transaction price, has reached an all-time high of $832 billion, growing at a rate of $38.6 billion per month. 

This signals robust underlying demand even as short-term volatility remains muted.

Moreover, long-term holders (LTHs) are regaining their accumulation footing after significant profit-taking earlier. LTH supply, which declined sharply as Bitcoin hit its $100,000 milestone, has stabilized and shows signs of growth. 

This shift suggests a return to a holding behavior, with accumulation outweighing distribution among this cohort.

Similarly, inflow volumes to centralized exchanges have significantly decreased, further highlighting a slowdown in speculative activity. 

Exchange inflows have dropped from a peak of $6.1 billion to $2.8 billion, a 54% decline, while long-term holder deposit volumes have plunged 83% to $92.3 million.

Retail absorbs supply

Retail investors, represented by the Shrimp-Crab cohort with less than 10 BTC, have shown strong accumulation behavior. Over the past month, this cohort has absorbed 25,600 BTC, nearly double the 13,600 BTC minted by miners during the same period. 

This absorption points to a robust demand among smaller holders, further supporting a foundation for the next market move.

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