The Drop in Bitcoin Price and Volatility Has Been Disappointing, but There’s an Important Detail!

• An on-chain researcher conducted an examination to show how Bitcoin’s claimed selling point, its volatility, has decreased compared to previous years, and shared their findings.
• In recent weeks, there has been an encouraging development, especially in how BTC and the overall market have responded more to crypto-specific events.
• In addition to HODLing for long-term benefits, a decrease in investors’ confidence in trading activities has also contributed to a reduction in Bitcoin’s liquid supply.

August was a tough month for Bitcoin price, but despite all the difficulties, there is a remarkable positive development in Bitcoin metrics!

August Was a Month Full of Events for Bitcoin

August proved to be a rather eventful month for Bitcoin compared to previous months, with rallies and crashes becoming the norm once again. However, when viewed overall, it became clear that BTC had perhaps gone through one of its quieter periods.

An on-chain researcher conducted an examination to show how Bitcoin’s claimed selling point, its volatility, has decreased compared to previous years, and shared their findings. A graph included in the share showed that the Bitcoin Volatility Index had fallen below 50 in recent months compared to 150 and above at the peak of the 2021 bull market.

One of the main reasons for the lackluster price movement of the world’s largest digital asset has been the tendency of investors to accumulate. BTC holders began transferring their assets to private storage methods instead of trading on exchanges.

Leading on-chain researcher Ali Martinez emphasized that withdrawals from exchanges for BTC have surpassed deposits for the last three months. According to Martinez, such a development had never been seen before.

In addition to HODLing for long-term benefits, a decrease in investors’ confidence in trading activities has also contributed to a reduction in Bitcoin’s liquid supply.

In recent months, U.S. regulators have started putting pressure on the largest exchange platforms like Binance and Coinbase. Consequently, the fear of losing access to their funds in an unexpected event prompted people to keep these funds in private storage.

Trading Activity Decreased in 2023

For much of 2023, Bitcoin’s trading volume remained subdued, according to Token Terminal data. While developments around spot ETF applications brought some volatility in August, trading activity was still significantly lower than the peak in March.

However, in recent weeks, there has been an encouraging development, especially in how BTC and the overall market have responded more to crypto-specific events. Unlike previous years when traditional macroeconomic triggers influenced crypto prices, there has been some divergence.