Glassnode: The real reason for BTC's low volatility is long-term holders locking up their coins, and this temporary stable state could be broken at any time.

Glassnode’s analysis notes that Bitcoin’s current volatility is at a historic low, but the factor truly suppressing volatility is not market cap growth. Using a regression model to test variables’ explanatory power for “de-trended realized volatility”, results show that the share of long-term holder (LTH) supply is the strongest driver, with an explanatory power of nearly 19% to 20%—far exceeding other indicators. Illiquid supply accounts for ~12%, and activity accounts for ~11.5%, ranking second and third respectively. By contrast, market cap itself has an explanatory power of only ~3.5%, placing it last, while stablecoin ratio has almost zero explanatory power. This means the intuition that “Bitcoin’s volatility drops as its market cap grows” is invalid: the more BTC is concentrated in long-term holders who rarely trade, the fewer floating chips available for pump-and-dump schemes and short-term speculation, leading to lower realized volatility. The key is the fragility of this structure: low volatility does not mean the market has matured enough to avoid sharp swings, but rather that floating chips are locked up. Once long-term holders start selling and illiquid supply becomes active again, volatility can quickly surge from its current low. While leverage, funding rates, and futures positions do have an impact, they all rank below the holder structure. The market’s current “dull” appearance is essentially a temporary steady state driven by chip distribution, not a permanent structural change.