Bitcoin's volatility has dropped sharply to 70%! On-chain activity has shrunk significantly; is there a market turning point lurking after the silence period?

Bitcoin ( BTC ) quarterly Realized Volatility ( dropped to 70%, approaching the cycle bottom level of September 2023 (62%), indicating that the market is entering a deep consolidation. However, on-chain alerts are frequent: daily trading volume fell to 188,000 transactions, and new addresses on the network only reached 72,100 (both are new lows for several weeks), with the NVT ratio soaring to 412, suggesting overvaluation, and the S2F scarcity model plummeted by 71.43%. Amidst the intertwined long and short signals, historical patterns indicate that such silent periods often give birth to significant market turning points.

Volatility Compression: The Calm Before the Storm? Bitcoin's volatility has decreased to 70%, close to the bear market bottom level of September 2023 (62%). Such a low volatility environment has historically often indicated significant directional breakthroughs. It is worth noting that the peak volatility of the current cycle at 143% is far lower than the 236% in 2021, indicating an overall easing of extreme market volatility.

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As of the time of writing, BTC is at 118,922 USD, with a slight increase of 0.59% over the past 24 hours. Under the stable price facade, on-chain activity reveals signs of fatigue.

On-chain cools down: Shrinking demand and valuation concerns

![])https://img.gateio.im/social/moments-87a9b3933a-8e640336fb-153d09-7649e1( Key on-chain indicators are weakening synchronously (Data source: Santiment):

• Number of Transactions: Plummeted to 188,000 transactions (multi-week low)

• Network Growth Rate: Fell to 72,100 new Addresses (User growth stagnation)

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This kind of shrinkage is common during a consolidation period, but if it continues, it will indicate a decline in interest, requiring macro catalysts or demand shocks to reverse.

A more severe signal comes from on-chain valuation model ) NVT Ratio ( —— this indicator has soared to 412, reaching a new high in several months. A high NVT indicates that the market cap growth far exceeds the actual on-chain trading volume, usually accompanied by a price peak or a phase of weak growth. However, history shows that if network throughput rebounds, this indicator may quickly recover.

Scarcity Narrative Under Challenge: S2F Model Collapse The core metric for measuring Bitcoin's scarcity, Stock-to-Flow Ratio ) S2F (, has experienced a 71.43% big dump (Source: CryptoQuant). This drop reflects a dramatic change in the relationship between existing circulation and new supply, posing a direct challenge to the scarcity narrative, which is one of the cornerstones of BTC's long-term valuation.

Although some opinions suggest that the S2F model has become invalid after the halving, there are also interpretations viewing it as an early accumulation signal. Regardless, the fact is that the logic of short-term scarcity is under pressure.

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Mining Pressure: Shrinking Profits but Not at the Brink Miner Revenue Multiple ) Puell Multiple ( has dropped to 1.25 (a nearly 13% fall), indicating that miner income is below the historical average. This level suggests a deteriorating profitability environment for miners, but it has not yet reached the 0.4-0.5 capitulation threshold for miner sell-off. The current state can be summarized as: profit contraction but no survival crisis, and miner selling pressure may weaken in the short term.

End of the Silent Period: Power Breakthrough or Deep Correction? Volatility compression, on-chain cooling, high valuations, and skepticism about scarcity form a contradictory combination. Historical experience shows that such multi-indicator silent periods are often a prelude to significant trend reversals.

Potential Path:

• Breakout upwards: If the volatility remains low and the fundamentals improve (such as institutional capital inflows, net purchases of ETFs), or if the cycle-starting market performance is repeated.

• Depth Correction: If on-chain activity continues to shrink along with increased selling pressure from miners, it may test key support.

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Conclusion: The Bitcoin market is in a typical 'eye of the storm' state—hidden battles between bulls and bears beneath a calm surface. The low volatility of 70% warns that a market turning point is approaching, but the shrinkage of on-chain activity and the collapse of the S2F model cast a shadow over the uptrend. Investors need to closely watch two signals: whether on-chain volume can recover to repair the NVT ratio, and whether miner income will fall below the survival line. The longer the silence period lasts, the more intense the fluctuation may be when a breakthrough occurs.