According to K33 Research, Bitcoin has recently entered a phase of "low volatility", with prices remaining stagnant. Over the past week, BTC only experienced a slight 0.2% decline, reflecting subdued market activity. Key indicators — including trading volume, volatility, and returns — have simultaneously dropped to multi-month lows.
Market Caution Prevails Amid Short-Term Uncertainty
Vetle Lunde, Head of Research at K33, notes that while long-term political support (e.g., from the Trump administration) may benefit Bitcoin and the broader crypto industry, short-term uncertainties are keeping investors on the sidelines. In a Tuesday report, he stated:
"Bitcoin metrics are cooling across the board — shrinking trading volumes, declining yields, reduced options premiums, and slowing ETF inflows. These indicators have reverted to pre-U.S. election levels. Additionally, market volatility has hit its lowest point in months."
Lunde highlights that 37% of the top 100 U.S. companies now exhibit higher 30-day volatility than Bitcoin, a phenomenon last observed in October 2023. However, he warns that such low-volatility conditions in Bitcoin rarely persist indefinitely, urging traders to prepare for potential abrupt shifts.
"The risk-averse sentiment suggests traders are bracing for downward volatility. Fortunately, leverage levels remain moderate, minimizing risks of large-scale liquidations."
CME Futures Premium Dips, Signaling Potential Market Inflection
Lunde’s analysis of Chicago Mercantile Exchange (CME) Bitcoin futures reveals a drop in the futures basis premium below 5% — a rare occurrence. Historical data (2021–2025) shows that weak premiums often correlate with bearish trends, possibly linked to lingering effects of the 2022 bear market.
- Basis Premium: The price gap between futures and spot prices. A premium (futures > spot) typically signals bullish sentiment, while a discount (futures < spot) indicates bearishness.
Lunde advises caution in the current climate:
"Given the uncertainty, we recommend a ‘wait-and-see’ approach until clearer directional signals emerge."
FAQ Section
Q: Why is Bitcoin’s volatility so low right now?
A: Short-term political and macroeconomic uncertainties have dampened trader activity, reducing price swings.
Q: How long can this low-volatility phase last?
A: Historically, such periods are short-lived. Traders should monitor CME futures premiums and ETF flows for early reversal signs.
Q: Should investors buy Bitcoin during stagnation?
A: It depends on risk tolerance. Dollar-cost averaging (DCA) may mitigate timing risks.
👉 Explore Bitcoin strategies during low-volatility markets
Q: What’s the significance of CME’s futures basis premium?
A: A shrinking premium often precedes bearish trends, making it a key metric for institutional sentiment.