Bitcoin net position change hits new monthly low; potential volatility ahead?

• Bitcoin may regain some volatility to end the month as options expire.
• Exchange reserves drop to a monthly low but some whales are still cashing out.

There are only a few days remaining until the month ends but this might be enough time for a major Bitcoin move. It has been losing volatility in the last few days but there is one event that can potentially trigger a resurgence of volatility.

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According to the latest Glassnode Alerts, Bitcoin holders net position change dropped to a new low of just over 30.5 million. This is confirmation that many BTC holders that bought in the last 30 days are still holding onto their coins.

📉 #Bitcoin $BTC HODLer Net Position Change just reached a 1-month low of 30,563.076

Previous 1-month low of 31,267.601 was observed on 11 January 2023

View metric:https://t.co/CU3jPaaHXh pic.twitter.com/O8luRaHDiS

— glassnode alerts (@glassnodealerts) January 27, 2023

Will Bitcoin options expiry trigger a volatility resurgence?

A large amount of Bitcoin options were set to expire on 27 January. This means the holders of those options may exercise calls or put options worth millions, potentially triggering another major price move. The market may thus experience a bullish or a bearish outcome this weekend depending on which directions the options will favor.

The latest rally and the fact that many investors are choosing to HODL may catch the bears off-guard. Meanwhile, multiple indicators currently point towards a bullish bias. For example, the Bitcoin exchange reserve dropped to a new monthly low in the last 24 hours. This means more coins are flowing out of exchanges.

Source: CryptoQuant

The market sentiment on the derivatives segment also looked bullish. The Bitcoin open interest metric registered additional upside in the last two days. This confirms a bit of a surge in demand from the derivatives.

The above observations align with Bitcoin’s price action in the last 24 hours. BTC managed to push back above the $23,000 price level once again as the bulls regained control.

Source: TradingView

Despite extending its upside, BTC’s MFI suggests that money is flowing out of the coin. This is not the only indicator that is currently contradicting the price.

Addresses holding over 1,000 BTC have been adding to their balances, for the most part, this month. There have been periods where there have been outflows, and this has been the case in the last two days.

Source: Glassnode

The above chart suggests that the addresses holding over 1,000 BTC have been selling in The last 48 hours. This aligns with the MFI and may indicate a build-up of sell pressure even though the price rallied in the last 24 hours.

Another interesting observation is that Bitcoin miners have been trimming their reserves since 12 January. The same metric has been flat from 19 January to the present.

Source: CryptoQuant

One would expect that miners would be hodling during the bull market but that does not seem to be the case. Nevertheless, the market appears to be going for another spike to end the month, although it would not be surprising if it closed lower.