Fundstrat Warning: Historical median shows Bitcoin may experience about 30% absolute volatility in the next 60 days.
Written by: Billy Bambrough, Forbes
Translated by: AididiaoJP, Foresight News
Since June of this year, the Bitcoin market has entered a rare lateral consolidation pattern, with prices oscillating within a smaller range, and volatility has dropped to historic lows. Although market participants generally expect the so-called "ultimate catalyst" to break the deadlock, macro-level uncertainties are intensifying market anxiety.
Currently, Bitcoin's price has fallen by about half from the historic high of approximately $65,000 reached in October 2025. Even though BlackRock's digital asset head Robert M. Shiller expressed optimistic expectations recently, pointing out that market sentiment has shown a "subtle yet noticeable positive shift," and reiterated the pattern that Bitcoin ultimately ends at higher price levels after undergoing five complete bull and bear cycles, the price still has not effectively escaped the current range.
It is worth noting that the Bitcoin ETF (IBIT) under BlackRock has holdings close to 750,000 coins, valued at about $50 billion, while the US spot Bitcoin ETFs saw a net inflow of over $850 million last week, marking the best single-week performance since mid-April. However, many positive signals have yet to translate into substantial upward momentum.
The key factors driving market sentiment from "calm" to "tense" lie in two sets of opposing yet simultaneously warming macro variables.
Firstly, the US fiscal deficit continues to expand, with a $1.8 trillion gap reinforcing market expectations for "currency issuance."
According to the latest data from the US Treasury, the federal budget deficit for July reached $432 billion, the largest monthly gap since March 2021, pushing the cumulative deficit for fiscal year 2026 to $1.8 trillion, second only to the extreme high reached during the 2020 pandemic. The total federal debt is nearing $40 trillion.
Against this backdrop, many crypto asset investors believe that government spending significantly exceeds income and can only rely on debt financing; if the private sector's absorption capacity is limited, it may ultimately force the Federal Reserve to restart balance sheet expansion.
Well-known crypto investor Anthony Pompliano stated in an interview with Fox Business that disordered government fiscal management will force continued currency issuance, while assets such as Bitcoin, gold, real estate, and stocks will benefit long-term from the depreciation of fiat currency. He even predicts that Bitcoin's annual growth rate could maintain around 30% over the next two decades.
BitMEX founder Arthur Hayes also pointed out in a recent analysis that the stronger the currency expansion, the firmer the basis for the upward shift in Bitcoin's valuation center, and he mentioned that he is increasing his allocation in Bitcoin, physical gold, and gold mining stocks.
Secondly, the bond market is sending a completely opposing risk signal.
This week, global bond yields have surged, with the yield on the US 30-year Treasury bond climbing to its highest level since 2002, the 20-year reaching a new high since 2006, and the benchmark 10-year hitting a peak not seen since 2007.
Traders generally attribute this rise in yields to a combination of factors, including the continued expansion of fiscal deficits, increased financing demands from infrastructure improvements related to artificial intelligence, sustained high international oil prices, and the uncertainty in monetary policy paths sparked by the new Federal Reserve Chairman Kevin Warsh.
Fundstrat's digital asset strategy head Sean Farrell pointed out that Bitcoin's 30-day realized volatility has fallen to one of the historically lowest ranges. He analyzed the past eight instances of similarly extreme low volatility periods and found that the median volatility of Bitcoin's absolute price over the subsequent 60 days reached 30.2%, with four instances of price increases and four of decreases, indicating that the metric only suggests volatility intensity rather than direction.
Using the current price of approximately $64,000 as a baseline, a 30% increase could push the price up to around $83,200, while a corresponding decrease could bring it back down to $44,800.
Farrell emphasized that the recent rebound in Bitcoin is partially due to short covering rather than large-scale influx of new capital; since last Friday evening, open interest in Bitcoin futures has decreased by about 8%. He explicitly views "the sustained rise in real bond yields" as a critical variable that could break the current low volatility pattern.
The Yardeni Research strategy team also stated in their report that, while no panic mechanisms have been triggered, they are closely monitoring whether bond market participants will take substantial actions. They believe that US Treasury yields remain within a conventional range of 4% to 5% but are nearing the upper end and need to be watched closely.
The so-called "bond vigilantes," which refer to the market forces that sell government bonds to push up yields in order to force adjustments in government or central bank policies, typically target overvalued risk assets when they act.
The continuous rise in bond yields has significantly reshaped the focus of the crypto market. Currently, traders' attention to the Treasury market has surpassed their assessments of the Federal Reserve's short-term interest rate path.
Analysts at the crypto trading platform Bitunix indicated that the core concerns of the market are no longer limited to whether the Federal Reserve will raise or lower interest rates, but are more focused on whether long-term Treasury yields will continue their upward trend, whether geopolitical risks evolve into sustained energy supply shocks, whether inflationary pressures will re-emerge, and whether global risk premiums will further widen.
If the 30-year Treasury yield continues to remain high and energy prices rise due to geopolitical tensions, stocks, cryptocurrencies, and other overvalued assets may face systemic pressure.
In this dual risk landscape, market participants are gradually preparing mentally for a potential deep correction.
Robin Sing, CEO of crypto tax service company Koinly, stated that as the US midterm elections approach, it is not unimaginable for Bitcoin to experience another sharp drop, and a price pullback to the $55,000 range is a reasonable scenario. He believes that, based on historical experience, markets often need to go through a thorough cleansing—where the last batch of bulls completely abandons their positions—before they can confirm a cycle bottom.
In summary, on one hand, the narrative of currency expansion stemming from massive fiscal deficits provides Bitcoin with medium to long-term upward momentum; on the other hand, the rising real cost of capital reflected by soaring bond yields is forming substantial pressure on risk assets.
The current Bitcoin market shows a pattern of "sellers exhausted, buyers waiting," while leveraged funds have already made bets on a rebound; the internal structure of the market itself presents significant instability. Historical data indicates that the probability of approximately 30% absolute volatility occurring in the next 60 days has significantly increased, regardless of the final direction, market participants must remain highly vigilant and prepare corresponding risk management measures.
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