According to BlockBeats, on May 19th, on chain data analyst Murphy published an analysis of BTC chip concentration. From May 7th to May 14th, BTC's chip concentration dropped from a high of 15.5% to 8.2% in just 7 days. As the price rises, it has gradually moved away from the chip concentration zone. If the concentration curve continues to decline, it is highly likely that the price will continue to rise.
After May 14th, the concentration curve suddenly stopped decreasing around 8.2% and showed a slight upward turn. The density of 8.2% was not significantly too high or too low. If the price falls and returns to the BTC chip concentration zone, the concentration curve will quickly rise again and brew greater volatility. Similar to the chart on January 23, 2025, the price retracement caused a decrease in concentration from a high level, followed by a turning point and a resurgence, after which price volatility was amplified. There is also a possibility that as prices continue to rise, the concentration curve will pause briefly before continuing downwards, similar to the situation on November 3, 2024 indicated in the graph.
In summary, if the current concentration curve does not go all the way down but pauses halfway, it will bring uncertainty to the market direction. It is difficult to predict whether to be bullish or bearish through a single indicator, and a single concentration curve indicates that the market may once again choose the direction of volatility. When the concentration rises to a certain height, considering long volatility would be a good choice. The sharing of market views is only for learning and communication purposes and is not intended as investment advice.
