Key Bitcoin Risk Indicator Signals Extreme Volatility Ahead: Details

Recent analysis from Swissblock indicates a significant surge in Bitcoin’s risk index, suggesting potential market volatility ahead.

According to a tweet by Swissblock Technologies, Bitcoin risk has spiked. In this context, Swissblock said that an index that had remained calm since October is now flashing emergency mode for Bitcoin. Risk levels have surpassed the August peak, triggered by market turmoil from the yen carry trade, and are now approaching September levels, when BTC corrected to $53,000.

Bitcoin Risk Spikes!

An index that had remained calm since October is now flashing emergency mode for Bitcoin. Risk levels have surpassed the August peak, triggered by market turmoil from the yen carry trade, and are now approaching September levels, when BTC corrected to $53K.… pic.twitter.com/j1uyPzU5c4

— Swissblock Technologies (@swissblock__) February 28, 2025

Currently, at 79.44, Swissblock’s analysis suggests that if the risk index reaches 100, it could signal the bottom of this correction and the start of a recovery. However, until such a peak is observed, patience would be essential.

At the time of writing, Bitcoin was up 5.73% in the last 24 hours to $84,633 after reaching highs of $86,534 in Saturday’s session.

Bitcoin price action

Bitcoin plummeted four consecutive days this week, its worst four-day slide since August. Bitcoin’s week-long slide continued on Friday, amid a larger retreat from risky assets, with the cryptocurrency falling as much as 8% to $78,167 at one point, taking its decrease from the all-time high reached less than six weeks ago to about 30%.

Bitcoin recovered its losses and ended up trading little changed for Friday’s session. Bitcoin declined by almost 18% in February, the largest monthly drop since June 2022.

Bearish sentiment has also hit spot U.S. Bitcoin exchange-traded funds, with investors pulling a record $3.3 billion in February, poised for the biggest monthly exodus since they debuted.

This week’s slide in Bitcoin has brought it below important technical levels: Bitcoin temporarily dipped below its 200-day moving average, now at $82,117, a key indicator for the long-term trend, for the first time since October before rebounding. In a positive development, the daily relative strength index (RSI), a measure of price momentum, has dropped below 30, implying that Bitcoin may be oversold. If this is the case, Bitcoin may have a relief bounce in the next sessions, but the likelihood of consolidation remains.

A break above or beneath the daily SMA 50 and 200 at $97,697 and $82,115 would spell the next direction trend.

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