Bitcoin's volatility has now exceeded levels seen during its all-time high in March and continues to climb, fueling speculation among traders that this may be the catalyst needed to push BTC out of its current consolidation phase.
To ignite a rally, Bitcoin needs to maintain a position above $61,000 and successfully retest the $62,000 mark, a level it hasn’t touched since August 9.
"Bitcoin, after a big slump in volatility levels, is now ramping back up and getting close to levels we saw earlier this year at the all-time highs," noted pseudonymous crypto trader Daan Crypto Trades in an August 21 X post. "It’s what’s eventually needed to put an end to this massive consolidation in one way or another," he added.
On August 21, the Bitcoin Historical Volatility chart, a tool that tracks Bitcoin's price fluctuations over time, recorded a 3.42% volatility rate, surpassing the 3.00% observed on March 13, when Bitcoin reached its all-time high of $73,679, according to CoinGlass data.
Less than two weeks later, on March 26, Bitcoin's volatility peaked for the year at 4.28%. While volatility alone isn't a bullish signal, it suggests that Bitcoin's price could soon experience significant movement beyond its current range, though traders caution it could also lead to downward pressure.
"Based on 10 years of price history, there is a high chance that September will print cycle lows," warned pseudonymous crypto trader TheoTrader.
Over the past 30 days, Bitcoin has declined by 10.99%, according to CoinMarketCap. Since the April 20 Bitcoin halving, the cryptocurrency has been consolidating within a wide range between $49,842 and $72,000. Increased volatility could benefit the market by drawing in more traders looking to capitalize on potential price swings.
Despite the recent fluctuations, futures traders appear optimistic about Bitcoin's future. The put-to-call volume ratio, which measures the demand for sell versus buy options, shows a preference for calls, with 66.18% calls versus 33.82% puts, resulting in a put-to-call ratio of 0.51.
As of the latest data, Bitcoin was trading at $60,875, having made an attempt to breach the $62,000 level but falling short at $61,552, according to CoinMarketCap. Crypto trader Matthew Hyland highlighted in an August 22 X post that Bitcoin is "testing the neckline," a trading pattern used to confirm support levels by drawing a line through the high points on Bitcoin’s price within a specific timeframe.
