Bitcoin (BTC) recently surged above $126,000 for the first time but quickly fell back by about 4%. Despite this decline, experts believe the overall trend indicates a notable stabilization in activity.

The long-term volatility of Bitcoin has reached historic lows, suggesting it is moving into one of its calmest phases, a precursor to significant price changes in the past.

Not Yet a Cycle Peak for BTC

According to Alphractal, Bitcoin’s 180-day volatility has dropped to unprecedented lows. This metric observes the standard deviation of daily returns and suggests that traders are currently experiencing remarkable stability. Similar conditions historically pave the way for major price movements.

Crypto analyst, Mr. Wall Street, believes that Bitcoin is primed for another major upswing following a brief pullback from its recent peak. After a dramatic rise of 16%, jumping from $108,000 to $126,000 in just ten days, he posits that BTC is currently consolidating rather than hitting a peak. Contrary to pessimistic forecasts of a cycle high, he interprets this period as an opportunity for a renewed price surge.

An essential factor impacting this situation is the ongoing accumulation by institutional powerhouses like BlackRock, which reportedly acquired $1.2 billion in Bitcoin on Tuesday alone and an additional $3.3 billion the week before. Mr. Wall Street argues that such substantial purchases will absorb liquidity and compel short sellers to exit their positions.

From a technical standpoint, he anticipates a retest of the 4-hour EMA200 trend before a definitive breakout, which could reflect the previous patterns seen prior to the substantial rally towards $110,000. On a macroeconomic front, weakening US economic data and a more dovish Federal Reserve stance could lead to dollar depreciation, which would further favor Bitcoin’s ascent.

Bears are Losing Ground

Recent trends in Bitcoin’s derivatives market indicate a rapid decline in selling pressure.

The net taker volume, which compares the size of buy and sell orders on derivatives platforms, has rebounded from an “extreme low” of -$400 million, shifting back to a neutral range. This transition signals a major shift in trader behavior and indicates diminishing bearish sentiment following months of dominance. Previous recoveries in net taker volume have often coincided with stronger support for BTC’s price movement stemming from derivatives activity.

A similar pattern was noted after the correction in April, which led to renewed bullish sentiment. The current market outlook appears to be stabilizing as buying and selling dynamics find a balance.