Golden Finance reported that CryptoQuant analyst Axel Adler Jr tweeted that investors are eagerly awaiting the release of key US inflation data at present. During this period, the volatility of Bitcoin has dropped to 200 ATR. This phenomenon has drawn widespread attention from the market, as the price fluctuations of Bitcoin have always been an important barometer of the cryptocurrency market.
ATR (Average True Range), namely the average true range, is a technical indicator used to measure market volatility. It reflects the average range of market price fluctuations within a certain time period. When the volatility of Bitcoin drops to 200 ATR, it indicates that the recent fluctuation range of Bitcoin’s price has narrowed compared to the previous period, and the market as a whole shows a relatively stable trend.
Judging from the historical data of Bitcoin’s price trend, its volatility has been in a state of dynamic change. In the past market cycles, Bitcoin has experienced many sharp price fluctuations. For instance, during the bull market of 2020-2021, the price of Bitcoin soared from less than $10,000 to nearly $69,000. During this period, its 30-day volatility once reached as high as 9%, and the price movement was as thrilling as a roller coaster. By 2022, affected by macroeconomic factors such as the aggressive interest rate hikes by the Federal Reserve, the price of Bitcoin plummeted to $16,000, and its volatility also fluctuated significantly during this period. However, entering 2025, the Bitcoin market gradually demonstrated different characteristics. Data shows that its volatility dropped below 2% in May and has now even reached as low as 200 ATR, indicating that the price fluctuations of Bitcoin are gradually stabilizing.
At present, investors are highly concerned about the inflation data in the United States because it is closely related to the direction of the Federal Reserve’s monetary policy. Stronger-than-expected CPI (Consumer Price Index) data may cool down the market. If the CPI data exceeds market expectations, it indicates an increase in inflationary pressure, which may prompt the Federal Reserve to adopt a more tight monetary policy to curb inflation. In this case, the possibility of the Federal Reserve cutting interest rates in the near future will decrease. For the Bitcoin market, changes in the Federal Reserve’s monetary policy are of crucial importance. Generally speaking, loose monetary policies, such as interest rate cuts, will increase market liquidity, prompting funds to seek new investment channels. As a promising investment asset, Bitcoin may attract more capital inflows, thereby driving up its price. Conversely, a tight monetary policy may lead to the outflow of funds from the Bitcoin market, exerting downward pressure on the price.
The views of CryptoQuant analyst Axel Adler Jr this time on the reduction of Bitcoin volatility to 200 ATR and its impact on US inflation data have also sparked many discussions in the market. Some investors believe that the reduction in Bitcoin’s volatility might be a sign that the market is maturing. In recent years, as an increasing number of institutional investors have flooded into the Bitcoin market, their professional investment strategies and stable risk management capabilities have, to a certain extent, mitigated the short-term fluctuations of the market. Institutional investors are more inclined to operate based on long-term investment value and are less likely to be swayed by short-term market sentiment. This makes the price trend of Bitcoin no longer completely dominated by the “buying high and selling low” behavior of retail investors as before. For instance, when the market experiences short-term fluctuations, individual investors might panic-sell Bitcoin, while institutional investors might choose to hold on or even buy at a low price based on their investment models and long-term market judgments.
However, there are also some market participants holding different views. They pointed out that although the current volatility of Bitcoin is at a relatively low level, the cryptocurrency market itself is highly uncertain and complex. The price fluctuations of Bitcoin are influenced by a combination of multiple factors. Besides macroeconomic factors and monetary policies, they also include technological innovation, regulatory policies, market sentiment, etc.
For instance, if there is a major breakthrough in blockchain technology in the future, it may enhance the security, efficiency and scalability of Bitcoin, thereby attracting more investors and triggering significant price fluctuations. For instance, changes in the attitudes of governments around the world towards Bitcoin and related policies and regulations can also have a significant impact on market confidence, which in turn leads to price fluctuations. Once a certain country introduces policies that strictly restrict or ban Bitcoin transactions, market panic may spread rapidly, triggering a sharp drop in the price of Bitcoin.
In addition, hot topics and celebrity remarks on social media may also ignite market sentiment in an instant, causing sharp fluctuations in the price of Bitcoin. A tweet about Bitcoin by Tesla CEO Elon Musk once caused a daily fluctuation of more than 10% in Bitcoin.
At the current critical juncture when Bitcoin’s volatility has dropped to 200 ATR and investors are awaiting US inflation data, all market participants are closely monitoring the subsequent developments. For investors, it is necessary to comprehensively consider various factors and carefully formulate investment strategies. If the US inflation data is released and the CPI data is stronger than expected, the possibility of the Federal Reserve cutting interest rates will decrease, and the Bitcoin market may face certain downward pressure. Conversely, if inflation data is in line with or lower than expected, the possibility of the Federal Reserve maintaining or easing monetary policy increases, and the price of Bitcoin may have an opportunity to rise. However, no matter how the market changes, the high risk of the Bitcoin market always exists. When investors participate in transactions, they must fully assess their own risk tolerance and avoid blindly following the trend to invest.
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