Disclaimer: Crypto is highly volatile and you could lose all your money, do your own research before investing.
Key Takeaways
- Bitcoin has reached its lowest volatility level in over 20 months, indicating reduced speculative trading.
- Daily on-chain transactions have dropped significantly, pointing to decreased user activity and market participation.
- Institutional investors are pausing major BTC movements as they await regulatory clarity and macroeconomic shifts.
- Dormant Bitcoin wallets are at all-time highs, suggesting a long-term holding sentiment among whales.
- Market analysts see this consolidation phase as a potential setup for Bitcoin’s next major breakout.
Bitcoin Enters a Rare Phase of Stillness
Bitcoin, often referred to as the most volatile asset class of the decade, is now experiencing an unfamiliar period of calm. According to blockchain analytics firms like Glassnode and IntoTheBlock, Bitcoin has entered its lowest 20-month volatility range as of mid-2025. While this may bring temporary relief to weary investors, it also signals a dramatic slowdown in market momentum and user activity across the network.
Low Volatility Reveals Market Apathy
Historically, Bitcoin thrives in chaotic environments. Its price swings—often by double-digit percentages within days—have lured traders and institutions seeking both risk and reward. However, current data shows Bitcoin’s price has been trading in an unusually tight range, fluctuating between $60,000 and $63,000 over the past several weeks. This compressed range mirrors the volatility seen in mid-2023, but now it’s coupled with a concerning drop in network activity.
Signup on Bybit and receive 100USDT as welcome bonus
Volatility indicators like Bollinger Bands and the Average True Range (ATR) confirm this stagnation. Analysts note that such compression often precedes either explosive rallies or sharp corrections, but the direction of the next move remains uncertain. Until macroeconomic signals or regulatory decisions break the deadlock, Bitcoin may remain in this tight corridor.
On-Chain Transactions Hit a Two-Year Low
Adding to the concern is a steep decline in Bitcoin’s daily on-chain transactions. As per data from BitInfoCharts, the average number of daily Bitcoin transactions recently fell below 190,000—its lowest since October 2022. For comparison, transaction counts often exceeded 300,000 during the bullish run of early 2024. This dramatic drop suggests reduced retail and institutional engagement with the Bitcoin network.
Low transaction volumes typically indicate that users are not moving BTC for payments, trading, or custodial shifts. The slowdown may reflect investor uncertainty, hesitation in executing large trades, or simply the lack of compelling market narratives driving usage. Either way, it raises questions about the health of Bitcoin’s utility as a decentralized peer-to-peer financial network.
Dormant Supply Reaches All-Time Highs
Despite the slowdown in activity, one metric continues to grow: the amount of dormant Bitcoin. According to CryptoQuant, nearly 70% of the total BTC supply hasn’t moved in over six months. This “HODLing” behavior, as it’s often called in crypto circles, highlights a strong conviction among long-term holders, even amid declining market volatility.
Signup on Bybit and receive 100USDT as welcome bonus
Interestingly, this trend is especially pronounced among wallets holding over 1,000 BTC. These wallets, often associated with institutional investors or early adopters, are showing no signs of distributing their holdings. Instead, they’re remaining static, likely waiting for clearer signals from inflation metrics, central bank decisions, or global regulations before re-entering the market in full force.
Institutional Activity Slows Amid Uncertainty
Institutional participation in the Bitcoin ecosystem has also cooled in recent months. Spot Bitcoin ETFs that launched with enormous enthusiasm in 2024 have seen reduced weekly inflows, while crypto hedge funds have rebalanced their portfolios toward stablecoins or alternative layer-1s like Ethereum and Solana. This strategic withdrawal doesn’t reflect a lack of faith in Bitcoin’s long-term viability—it reflects a calculated pause.
Many large investors are waiting to assess how upcoming events will influence Bitcoin’s next move. Among these events are interest rate decisions from the U.S. Federal Reserve, political developments tied to the 2024 U.S. presidential administration, and global economic signals like China’s recovery and oil prices. Until these variables become clearer, institutional actors appear content to sit on the sidelines.
Mining Activity Remains Resilient
Interestingly, despite lower on-chain activity and price stagnation, Bitcoin mining remains strong. Hashrate levels continue to hover near all-time highs, suggesting miners are still confident in the network’s long-term profitability. This resilience is likely tied to the recent halving event, which occurred in April 2024. Though rewards have been reduced, the price of BTC still provides enough incentive for industrial-scale miners to operate efficiently.
Mining difficulty has also adjusted smoothly in line with hashrate fluctuations, ensuring network security is not compromised. The sustained interest in mining is viewed as a positive sign for Bitcoin’s underlying strength, even if surface-level metrics like transactions and volatility paint a more cautious picture.
Lightning Network Sees Slight Uptick
While base-layer transactions on Bitcoin are in decline, activity on its layer-2 scaling solution—the Lightning Network—has seen a modest uptick. According to data from Amboss, the total capacity of the Lightning Network has increased by 4% over the last quarter, reaching nearly 5,800 BTC.
Although this increase is not dramatic, it suggests that some users are shifting smaller payments and transactional activity off the main chain to avoid fees and congestion. However, this doesn’t fully compensate for the broader network slowdown. It does, however, signal ongoing development and utility within Bitcoin’s ecosystem, even during periods of lull.
Potential Catalysts for a Breakout
Despite the current stagnation, market observers believe this low-volatility period is a setup for significant movement ahead. Bitcoin has historically displayed patterns of price compression followed by explosive breakouts. Similar phases occurred before the 2020 bull market and after the pandemic crash of 2021.
Key catalysts on the horizon include:
- Approval of Ethereum ETFs, which could increase overall digital asset exposure
- A shift in monetary policy from the Fed, especially interest rate cuts
- Upcoming upgrades to Bitcoin’s Taproot infrastructure for smart contract deployment
- Increased adoption of Bitcoin in emerging markets like Argentina and Turkey
These factors could inject fresh momentum into the BTC market and break the prolonged sideways trend.
Conclusion
Bitcoin’s current state of low volatility and transactional inactivity represents a rare phase in the asset’s storied history. While this calm may seem dull to traders and speculators, it offers deeper insights into how the market is maturing. Long-term holders appear undeterred, choosing to wait patiently rather than exit. Institutional players are recalibrating based on external macroeconomic signals. And the Bitcoin network, especially its mining infrastructure, remains robust and secure.
Periods of low volatility are not inherently bearish—they are often precursors to significant moves. As more catalysts line up on the global economic front and regulatory clarity improves, Bitcoin may be preparing for its next major chapter. Whether that chapter begins with an upward rally or a correction remains to be seen, but one thing is certain: Bitcoin’s story is far from over.