Bitcoin Price Volatility Set to Rise as It Dips Into Supply ‘Air Pocket’
Bitcoin (BTC) is showing signs of increased volatility after slipping below the $75,000 level twice in the past week, deepening its retracement from the all-time high of $109,000 set on January 20.
The recent decline has pushed BTC into a key low-supply zone — or “air pocket” — between $70,000 and $80,000, according to on-chain data from Glassnode. This range formed after bitcoin surged sharply post-President Donald Trump’s November election win, climbing straight from $70,000 to over $100,000 without much pause.
Historically, when bitcoin skips consolidation at important price levels during fast rallies, it often circles back to revisit those zones. The lack of previous price interaction in this range means fewer coins were transacted here, indicating thin supply and setting the stage for heightened volatility.
One of the clearest ways to analyze this is through the Unspent Transaction Output (UTXO) Realized Price Distribution (URPD), which maps where the current BTC supply was last moved based on price. In this model, each wallet’s average cost basis places its BTC balance into price bands, helping to visualize key support and resistance levels.
Currently, less than 2% of bitcoin’s total supply sits in the $70K–$80K range — underscoring the thin trading history and the potential for sharp moves in either direction if price lingers here.
For BTC to build a foundation for its next major move, it may need to consolidate within this underexplored territory. A sustainable breakout — whether higher or lower — will likely hinge on establishing stronger price interaction in this zone.
Adding to the market pressure, nearly 25% of the circulating BTC supply is now underwater, mostly belonging to short-term holders who bought within the past 155 days. These investors may become more reactive to market swings, potentially accelerating any price volatility in the near term.
