Bitcoin has faced another volatile week, with ongoing declines reinforcing the bearish trend seen in recent months. Despite a late rally on Friday, the cryptocurrency has failed to break through key resistance levels and is currently trading around $69,000. Analysts are turning to on-chain data to gauge investor sentiment and predict where Bitcoin might head next.
In a recent analysis, CryptoQuant’s Amir Taha highlighted how the market reacted to the latest U.S. Consumer Price Index (CPI) report. The inflation reading came in at 2.4%, exceeding expectations and boosting optimism for risk assets like Bitcoin. Following the announcement, Bitcoin futures activity on Binance surged sharply.
One notable spike was in Net Taker Volume, with a single hourly reading exceeding $265 million. This metric reflects aggressive trading in futures markets, and such a high positive value suggests buyers quickly opened long positions, expecting prices to rise. At the same time, an increase in Open Interest indicates traders are putting new capital into leveraged positions rather than just closing old ones. While this shows renewed speculative interest, it also raises the risk of liquidations if the market turns.
Despite the bullish positioning in derivatives, on-chain data reveals stress among short-term holders. The Short-Term Holder to Long-Term Holder MVRV ratio has dropped to 0.72, below previous lows from August 2024 and April 2025. This suggests short-term holders are facing average unrealized losses of about 44%. Historically, similar declines have occurred during capitulation phases, when weaker investors sell under pressure.
Taha also points to data showing short-term holders have realized significant losses, with their realized cap falling to around -$57 billion. In contrast, long-term holders remain resilient, maintaining a positive realized cap near $35 billion and continuing to accumulate despite the panic among short-term traders.
The combination of rising leveraged long positions and mounting losses among short-term holders signals increased market instability. As a result, Bitcoin investors should brace for more volatility in the near term, as the market looks for a clearer direction from macroeconomic trends or on-chain shifts.
At the time of writing, Bitcoin is trading at $68,929, up 5.06% over the past day.
Frequently Asked Questions
FAQs Bitcoin Volatility OnChain Data After CPI Figures
Beginner Questions
Q1 What are CPI figures and why do they matter for Bitcoin
A1 CPI stands for Consumer Price Index a key measure of inflation When inflation is high or unexpected it influences investor sentiment and central bank policies which can affect Bitcoins price as investors adjust their portfolios
Q2 What is onchain data in Bitcoin
A2 Onchain data refers to information recorded on Bitcoins public blockchain like transaction volumes wallet activity and large transfers Analysts use it to gauge market sentiment and predict price movements
Q3 Why might Bitcoin become volatile after CPI news
A3 CPI data can shift expectations about interest rates and economic policy If the data surprises markets traders may quickly buy or sell Bitcoin leading to sharp price swingsespecially if onchain data shows heightened activity
Q4 How does onchain data suggest upcoming volatility
A4 Metrics like increased large transactions rising exchange inflowsoutflows or unusual wallet activity can signal that big investors are preparing to move Bitcoin often preceding price volatility
Q5 Should I be worried about Bitcoin volatility as a new investor
A5 Volatility is normal for Bitcoin If youre investing consider it a longterm asset avoid investing more than you can afford to lose and use strategies like dollarcost averaging to reduce timing risk
Intermediate Questions
Q6 Which specific onchain metrics hint at postCPI volatility
A6 Watch for spikes in exchange netflow changes in the MVRV ratio and whale transaction countsthese often indicate shifting sentiment
Q7 How quickly does Bitcoin usually react to CPI releases
A7 Reactions can be immediate within minutes or hours as traders digest the data However sustained volatility may unfold over days as onchain patterns develop
Q8 Can onchain data predict the direction of price moves or just volatility
A8 Its better at signaling potential volatility than exact direction For example large exchange inflows may suggest selling pressure but other factors