Bitcoin's monthly net position change has hit a new low, signaling the possibility of further volatility.
Even if there are only a few days left until the end of the month, Bitcoin may undergo a significant price change. Its volatility has been decreasing over the past several days, but there is one incident that might cause a rise in the market's volatility.
According to the most recent Glassnode Alerts (1), the net position change of Bitcoin holders has reached an all-time low of slightly more than 30.5 million. This provides evidence that many Bitcoin holders who acquired their holdings during the past month are keeping their currencies.
High Volatility Expected Ahead
On January 27th, a significant number of Bitcoin options were going to become invalid. This indicates that the owners of such options may execute calls or put options worth millions, which may potentially set off another significant price movement. As a result, the outcome of this weekend's trading on the market might either be bullish or negative, depending on which way the options will favor.
The most recent gain and the fact that several traders are opting to hold on to their positions could take the bearish by surprise. In the meanwhile, several indications are now pointing towards a bullish bias. For instance, over the past twenty-four hours, the Bitcoin exchange balance reached a new monthly low, indicating that more coins are leaving exchanges.
Additionally, the market mood about the derivatives sector appeared to be optimistic. For the last two days, the Bitcoin open interest gauge reported more gains in the positive direction. This substantiates the claim that there has been a recent uptick in demand from derivatives.
The price activity of Bitcoin over the past twenty-four hours is consistent with the findings made above. As the bulls took control of the market once more, the price of BTC was able to break back successfully over the $23,000 threshold.
Even though it has continued upward, Bitcoin's MFI indicates that investors are selling off their holdings. There are other indicators as well that are now giving a signal that is inconsistent with the pricing.
The majority of Bitcoin addresses that already have more than 1,000 BTC have been increasing their holdings throughout this month. There have been phases of withdrawals, which has been the case during the past two days. There have also been times when there have been inflows.
According to the data presented, more than 1,000 BTC addresses have been selling within the past two days. Despite the fact that the price has moved upward in the previous twenty-four hours, this is consistent with the MFI and may suggest a buildup of sell pressure.
Since January 12th, Bitcoin miners have started reducing their reserves, which is another noteworthy discovery that has been made. Since January 19th, the same statistic has remained unchanged.
During the current bull market, one would think that miners would hoard their resources, but this does not appear to be the case. Despite this, the market is setting itself up for another surge before the end of the month. However, it would not be unusual if the month ended on a lower note.