While price movements in the Bitcoin market narrow, the decrease in leveraged positions reveals a more balanced outlook against possible sharp fluctuations. According to CryptoQuant analyst Axel Adler Jr., Bitcoin has recently entered a compression period dominated by low volatility.
According to the data shared by Adler, the 30-day average of Bitcoin’s one-week volatility decreased to 28.3. This rate indicates a decrease of approximately 31 percent compared to the peak of 41.6 recorded on June 25.
Current volatility is around the eighth percentile of the historical distribution observed since 2016. In other words, in 92 percent of past trading days, Bitcoin’s volatility was higher than today. This indicates that the price is increasingly stuck in a narrow range before a significant move.
Leverage decreases, liquidation risk decreases
Data in the futures market reveals that investors do not accumulate leverage during periods of low volatility. The 30-day momentum indicator, which measures the ratio of open positions to market value, has been in the negative zone for 21 days uninterruptedly.
Although the Bitcoin price increased by approximately 11.4 percent from its lowest level in June, there was no significant expansion in positions in derivative markets. According to the analyst, this picture reduces the risk of a large-scale liquidation chain in case the price reverses sharply.
CryptoAppsy According to market data, Bitcoin is traded around 66 thousand dollars. The largest cryptocurrency lost approximately 0.32 percent in the last 24 hours. However, the price remains below the 200-day moving average at $72,666.
Adler pointed out that downside risks may increase if volatility rises above the 35 level again and Bitcoin cannot remain permanently above the 200-day average.
Another important development on the Bitcoin front came from Galaxy Digital. The company launched the $5 million Bitcoin Quantum Security Readiness Initiative to prepare for security threats that quantum computers can pose.
Within the scope of the fund, signature algorithms that are resistant to quantum computer attacks and protocols that will enable existing Bitcoin wallets to be moved to a new security system will be supported. Galaxy Digital also aims to accelerate Bitcoin’s transition to a post-quantum security infrastructure by involving different institutions in the research process.
If quantum computers reach the capacity to break Bitcoin’s current encryption system, approximately 6.9 million BTC may be at risk. The value of this amount at current prices corresponds to approximately 461 billion dollars.
