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Fundstrat said Bitcoin’s volatility is nearing a record low, suggesting BTC could see a price move of around 30% in either direction over the next two months.
According to CNBC, Fundstrat Head of Digital Asset Strategy Sean Farrell said in a client note on Aug. 17 that in past periods with similarly low volatility, the median absolute price move over the following 60 days was about 30%. Farrell said the direction was unclear, but the scale of the next move could be significant. In eight such cases, four ended higher and four ended lower.
On BTC’s recent rebound, Farrell said much of the move appears to have been driven by short liquidations. BTC perpetual futures open interest fell about 8% while the price rose after Aug. 14, according to the note. Farrell added that in June and early July, short covering also temporarily pushed prices higher, but those gains were later erased, and he presented a similar pattern as the base-case scenario this time.
As a risk factor, Farrell pointed to rising long-term real interest rates, saying they could trigger BTC to break out of its current narrow trading range.