Key Points
- Bitcoin’s volatility has dropped to long-term lows as investors await U.S. inflation data.
- Investors are reducing leverage and shifting towards a more cautious approach in the crypto market.
Bitcoin’s recent rally to a new all-time high has not affected its volatility, which remains at historical low levels.
CryptoQuant’s analyst, Axel Adler, reports that Bitcoin’s volatility has dropped to a 200 Average True Range (ATR), indicating calm price movements and long-term lows.
Market in “Wait and See” Mode
The market appears to be in a “wait and see” mode as on-chain activity slows down.
Low volatility usually means smaller, more stable price swings, leading to decreased capital inflow from both retail and institutional investors.
Bitcoin’s Mean Coin Age has been climbing steadily, indicating that more investors are choosing to hold onto their coins.
As this holding trend strengthens, the Mean Coin dollar Age is nearing 18 million, further reinforcing the long-term sentiment.
Investors Anticipate U.S. Inflation Data
Investors are currently in a wait-and-watch mode ahead of the U.S. inflation data release.
The Consumer Price Index (CPI) report from the Bureau of Labor Statistics is due for release, sparking widespread speculation about the potential market impact.
The CPI data could show an increase due to tariffs imposed in April.
This release is critical as it could reshape the broader economic outlook, including the crypto market.
If the reading is stronger than expected, it could lower the chances of a near-term Federal Reserve rate cut, which would typically be bearish for Bitcoin.
On the other hand, if the CPI reading is favorable, Bitcoin’s uptrend could continue, increasing the likelihood of a retest of its all-time high.
