The Bitcoin market may be approaching a period of sharp price swings after recording one of its lowest volatility readings of 2026. According to a report published by analytics firm K33 on Wednesday (21), the cryptocurrency is showing low trading activity as investors await two significant events in the United States: the next Federal Reserve interest rate decision and the American midterm elections.
Per the survey, Bitcoin's realised volatility over the past 28 days fell to 1.2%, approaching the lowest level recorded this year. The indicator measures the intensity of price swings that actually occurred during a given period.
The decline comes after Bitcoin spent the past week trading mainly between US$80,000 and US$84,000, without establishing a clear upward or downward trend.
For K33, this behaviour points to a market in a holding pattern, but one that could also precede more intense moves.
"Expansions usually follow periods of compression, and we expect BTC volatility to rise soon," said Vetle Lunde, head of research at K33.
The firm also identified a reduction in investor activity. Average daily spot trading volume for Bitcoin stood at US$2.5 billion, down 1% from the previous week.
According to the analysts, the cryptocurrency has shown a consolidation pattern since 21 September, with relatively limited investor participation. K33 compared the scenario to the one observed during the market recovery in 2023.
Low volatility, however, does not necessarily mean Bitcoin is about to surge. Historically, periods of reduced price swings can be followed by stronger moves in either direction, up or down.
Despite the caution, US spot Bitcoin ETFs continue to attract inflows.
On 19 October, BlackRock's IBIT recorded inflows equivalent to 8,128 bitcoins, its largest daily positive flow in BTC terms since April 2025.
Across all US spot Bitcoin ETFs, net inflows that day totalled the equivalent of 6,436 BTC, according to K33.
The difference arose because other funds saw combined outflows of 1,692 BTC, offsetting part of the inflows into BlackRock's product.
The result shows that, even with reduced trading activity, institutional demand for the cryptocurrency persists.
Fed decision and US elections could move Bitcoin
K33 points to two events that could pull Bitcoin out of its current period of relative stability. The first is the Federal Reserve's next monetary policy decision, scheduled for 28 October following a two-day meeting.
According to the data presented in the report, the market was pricing in roughly an 80% probability that US interest rates would be held steady at the meeting.
This matters because Fed decisions influence the cost of money and investors' willingness to take on risk.
Higher interest rates tend to favour investments seen as safer, such as US Treasury bonds, while assets like Bitcoin and technology stocks can face greater pressure.
Even if rates are held steady, remarks from Fed Chair Kevin Warsh and signals about upcoming meetings could shift investor expectations.
The second event is the US midterm elections, scheduled for 3 November.
These elections will determine the composition of the House of Representatives and part of the Senate, potentially shifting the balance of power in Congress.
For the cryptocurrency market, the outcome could have consequences for the progress of proposals related to digital asset regulation, stablecoins and financial market structure.
However, the impact on Bitcoin's price remains uncertain and will depend both on the election result and on how investors react.
Another factor flagged by K33 is the relationship between Bitcoin and the US stock market. According to the firm, the correlation between the cryptocurrency and the Nasdaq has increased again after weakening during August and September.
Over the past two weeks, returns on the two assets have been nearly identical, indicating that Bitcoin has gone back to tracking technology stocks more closely.
The relationship was evident during the recent decline in US stock markets, driven by concerns over inflation and semiconductor companies.
Even so, Bitcoin showed relative resilience: while the Nasdaq posted its worst week since April 2025, the cryptocurrency dropped roughly 2%.
K33, however, cautions that this performance does not mean Bitcoin has stopped tracking the stock market.
Joel Kruger, market strategist at LMAX Group, said Bitcoin and Ethereum remain in a consolidation phase following the recovery seen in August and September.
Speaking to The Block, he said the recent rise in US Treasury yields and the strengthening dollar show that markets are still adjusting their expectations.
Despite this, Kruger believes the recent losses could represent a pause in the crypto recovery, with the possibility of renewed gains before the end of the year.
On Wednesday afternoon, Bitcoin was trading around US$83,000, still within the price range observed by K33 in recent days.
For the analysts, the combination of low volatility, reduced trading activity and the proximity of major economic and political events creates conditions for a possible shift in the cryptocurrency's behaviour in the coming weeks.
The direction of that move, however, remains uncertain.
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