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Bitcoin volatility drops to 70% amid declining market activity

Bitcoin's quarterly realized volatility has decreased, approaching levels not seen since September 2023.

July 29, 2025 at 04:04 AM

Bitcoin volatility hits 70%, echoes 2023 lows: Will history repeat itself?

Bitcoin experiences a dip in volatility akin to trends seen in 2023.

Bitcoin volatility drops as market activity weakens

Bitcoin’s quarterly realized volatility has fallen to 70%, nearing the September 2023 lows of 62%. This decline indicates a consolidation phase in the market. As of now, Bitcoin is trading at $118,922, with a slight daily increase of 0.59%. However, on-chain activity shows a concerning drop, with transaction counts plummeting to 188,000 and network growth at 72,100, both marking multi-week lows. This trend suggests potential fading interest in Bitcoin, coinciding with a spike in the Network Value to Transactions (NVT) Ratio, indicating possible market overvaluation. The Stock-to-Flow Ratio has also declined drastically, placing pressure on Bitcoin’s perceived scarcity. While miner profitability is currently manageable, the Puell Multiple shows signs of strain, reflecting a tough environment for miners. If Bitcoin's fundamentals do not realign, the risk of diminished interest could increase dramatically.

Key Takeaways

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Bitcoin's volatility has decreased to 70%, signaling a consolidation phase.

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On-chain activity is at multi-week lows, suggesting reduced user engagement.

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The NVT Ratio at 412 indicates potential market overvaluation.

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Stock-to-Flow Ratio has plummeted by 71.43%, weakening the scarcity narrative.

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Miner profitability metrics show pressure but remain above critical levels.

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Historical patterns suggest that low-volatility periods can lead to market breakouts.

"Bitcoin's NVT Ratio spiked to 412, indicating potential market overvaluation."

This rise suggests that Bitcoin's market cap is surpassing transactional volume, signaling reduced utility.

"The Stock-to-Flow Ratio has collapsed by 71.43%, challenging fundamental valuation models."

Such a drastic change raises questions about Bitcoin's long-term value proposition.

"The Puell Multiple indicates miner revenue pressure without outright distress."

This points to a delicate balance for miners, where profitability is shrinking but not critical.

"Bitcoin's current activity dip may signal a short-term cooldown unless revitalized by market catalysts."

This reflects the general state of market hesitation amid declining user metrics.

The current landscape for Bitcoin is critical. The drop in volatility paired with declining transaction activity raises red flags for investors. Historically, such low-volatility conditions are precursors to significant market movements. However, the current data suggests that Bitcoin may not have the same vigor as in previous cycles. With signs of potential overvaluation and diminishing user engagement, the market could face an unsettling period if these trends continue. Investors should remain alert, as prolonged stagnation may lead to a sharper correction in interest and prices.

Highlights

Low volatility often means something big is coming in Bitcoin.
Declining user engagement could signal fading interest in Bitcoin.
High NVT levels could hint at Bitcoin's potential overvaluation.
Bitcoin's scarcity narrative is under pressure after sharp declines.

Market activity may signal fading interest in Bitcoin

The decline in transactions and high NVT levels raise concerns about market overvaluation and user engagement. If trends persist, Bitcoin may face reduced interest and investment.

The future of Bitcoin hinges on whether user activity can rebound in coming weeks.

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