This is what the Bitcoin market looks like when it's about to explode: data confirms it

Find out what specific signs experts are watching to anticipate a Bitcoin market explosion and what to expect in the coming days.

Bitcoin is currently experiencing a period of calm, marked by record lows in implied volatility, a fact that specialized analysts point to as a sign of significant movement on the horizon. 

According to experts, this phenomenon is not new, since in 2023, a similar situation preceded a historic rally 325% in the price of the leading cryptocurrency. Today, technical analyses conducted by experts from CryptoQuant and XWIN Research Japan offer a detailed reading of the Bitcoin market, based on on-chain indicators and derivative behaviors, which point to a period of "calm before the storm"; that is, before a new explosion in the BTC price. 

Bitcoin volatility at historic lows

One of the most closely watched indicators in the financial markets is the implied volatility, which measures expectations of changes in an asset's future price. In the case of Bitcoin, implied volatility has recently fallen to its lowest level since 2023At that time, this scenario anticipated an extraordinary increase in its value. 

The price of Bitcoin rose from approximately $29.000 in July 2023 to its current all-time high of $124.000, reached in August of this year. This increase in BTC's value represents a 325% gain.

This Bitcoin market data is relevant because prolonged periods of low volatility are often followed by sharp price movements. Analysts at CryptoQuant and XWIN Research Japan highlights that the current stability in BTC volatility could constitute the “calm before the storm” they describe, a time when the market builds up tension before making a significant move, either up or down.

“Bitcoin’s implied volatility has fallen to its lowest level since 2023, a point in time that previously preceded a historic +325% rally from $29K to $124K. Today, the question is whether the same “calm before the storm” dynamic is playing out once again.” analysts said in a recent publication. 

The on-chain signals that mark the pulse of the market

In addition to Bitcoin's implied volatility, experts have pointed to several key indicators within the on-chain ecosystem that offer deeper insight into the current dynamics of the leading cryptocurrency:

1. Exchange reserves in prolonged decline

Data shows that Bitcoin reserves available on exchange platforms or CEX are in minimum levels not seen in several yearsThis decline means there are fewer BTC listed for immediate purchase on exchanges, which may reduce the supply available to buyers.

This trend indicates that institutional traders and large holders are withdrawing assets from public markets, possibly for long-term storage, what is known in the market as doing HODLingAs a result, if demand for BTC increases and supply remains low, the market could experience a supply shock, which typically results in rapid and sharp increases in the asset's price.

2. MVRV Ratio in Neutral Zone

The ratio MVRV (Market Value to Realized Value) It is an indicator that compares the market value of Bitcoin with the value that investors have paid for their coins, providing insight into unrealized gains and losses.

Currently, the MVRV remains around 2.1, a neutral zone that reflects that investors are neither experiencing significant losses nor taking excessive profits. This balance reduces the likelihood of panic selling or profit-taking, which can translate into less negative pressure on prices.

Therefore, the Bitcoin market appears to be taking a "wait and see" stance, holding back while buyers and sellers calibrate their strategies.

3. Balanced funding rates in derivatives markets

Funding rates on Bitcoin perpetual contracts in derivatives markets also show a peculiar balance. These rates, which reflect the cost of holding long or short positions, are positive but moderate.

This situation indicates that there are no extreme or predominant bets on bullish or bearish movements, which in turn suggests that traders are maintaining their positions cautiously, without precipitating an abrupt increase in volatility.

Together, these three elements reveal a market that is accumulating energy—without wasting it—and waiting for clear signals to define its next course.

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General analysis: calm before a possible upward movement

According to the analysis in question, Bitcoin's current performance is characterized by a contained market, with restricted supply on exchanges, patient-minded investors, and derivatives without signs of extreme speculation. This combination creates a pause that, according to the cryptocurrency's history, is usually short.

Past studies confirm that these episodes of low volatility, accompanied by those same on-chain indicators, have been preludes to both strong rises and significant corrections. The big question for analysts, as they point out in their publication, is whether the next big move will involve a significant bullish rally or a marked correction.

Experts at CryptoQuant and XWIN Research Japan agree that the current market structure indicates an imminent inflection point, although there is no consensus on the definitive direction. The key will be the evolution of demand and the possible emergence of external catalysts, such as US monetary policy, that could change the current balance.