Analysis of Potential Return of Volatility in the Cryptocurrency Market

In the cryptocurrency market, an analysis has emerged suggesting that the period of low volatility may be ending and price fluctuations could increase again. A virtual asset analyst from Darkpost stated on the 22nd via X, "There is a lot of liquidity accumulated below the current price, so there is a possibility of a pullback taking some of that liquidity." The potential for increased volatility is often mentioned during periods when the market has not yet determined a direction, and until a clear upward or downward trend is confirmed, short-term rebounds and pullbacks may alternate. The presence of lower liquidity does not necessarily indicate a decline; it simply signals that orders and liquidation volumes are stacked below the price. From a supply and demand perspective, there is no definitive direction, and while lower liquidity can increase short-term volatility when prices drop, there is also a possibility that the flow could change as pending orders are filled. Therefore, it is difficult to conclude market demand recovery or further declines based solely on liquidity distribution. The key point of this analysis is that the assumption that the market will move in one direction immediately is weak.

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