Bitcoin Volatility Near Historic Lows, With Long-Term Holder Supply a Key Factor

Forecast Trend Report by Period

Bitcoin volatility has fallen to historically low levels, with supply held by long-term holders emerging as a key factor behind the recent calm.

Glassnode, an on-chain analytics firm, wrote in a post on X, formerly Twitter, on Sept. 8 that Bitcoin volatility is currently at historically low levels. The firm said elevated long-term holder supply is having a major influence in explaining the subdued volatility.

Glassnode's analysis found that long-term holder, or LTH, supply showed the closest relationship with changes in Bitcoin's realized volatility, with explanatory power of about 19%. Illiquid supply followed at about 12%. By contrast, market capitalization accounted for only about 3%.

The ratio of futures open interest, or OI, to market capitalization and spot trading volume also had less influence on volatility than long-term holder supply, according to the firm.