The spring is tightening: Bitcoin's exchange volumes and volatility plummet

Barring an increase in transactions caused by the frenzy around ordinals, Bitcoin network usage will hit a two-year low. The indicator of exchange activity is used to illustrate the situation. It gives the ratio of weekly deposit and withdrawal volumes over the past seven days with the six-month average. Recent activity is down 27.3% for cryptocurrencies as a whole and 29% for Binance in particular.

Monthly realised volatility declined even further, falling to 34.1%. Historically, this level has only been observed on one day out of five, which foreshadows strong price swings in the near future.

In terms of price targets, the price will be locked in between the realised price for active investors ($33,500) and investors' MVRV ($17,700).

Meanwhile, the unrealised profit/loss ratio for short-term holders (STH) returned to breakeven levels after being in a zone of euphoria. This return often becomes a support level, after which the price rushes up again (indicated by x̅ on the chart).

On the macroeconomic side, as the cryptocurrency market matures, Bitcoin's correlation with traditional financial instruments increases. The following example shows the nearly synchronous movements of gold, silver and Bitcoin over the past 12 months. The exclusion was triggered by the collapse of the third most-visited crypto exchange, FTX.

We are now in the compression stage of the spring since the decline in activity is not specific to Bitcoin.

The protracted dance over increasing the US debt ceiling or the Fed pausing the tightening of its monetary policy could lead to an imbalance as soon as June. 

StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)