Cryptocurrency analytics firm CryptoQuant has released a comprehensive report indicating that Bitcoin's implied volatility has dropped to its lowest level since 2023, creating a market environment reminiscent of past cycles that preceded historic rallies. Historically, similar periods of low volatility have led to price surges exceeding 300%, such as a 325% rally observed in previous years.
Key on-chain metrics support the "calm before the storm" narrative: Bitcoin reserves on exchanges are declining to multi-year lows, reducing immediate sell-side pressure and setting the stage for a potential supply squeeze if demand spikes. The Market Value to Realized Value (MVRV) ratio is neutral at approximately 2.1, indicating investors are neither in significant profit nor loss, which minimizes panic selling or aggressive profit-taking.
Additionally, funding rates across major exchanges are positive but moderate, reflecting balanced derivatives activity without excessive leverage. The NVT Golden Cross has improved by nearly 33%, signaling stronger on-chain transaction volumes relative to Bitcoin's valuation, while short-term holder activity has increased, though long-term holders remain steadfast. Analysts caution that while these conditions often precede explosive moves, the direction—upward or downward—remains uncertain and dependent on external catalysts.