Bitcoin Breaks $106K as Volatility Spikes and Market Tests Liquidity

Bitcoin surged past $106,000 as short-term volatility spiked, signaling a liquidity-testing phase on Binance.

Bitcoin (BTC) climbed past $106,000 early Monday, following a weekend of erratic trading that left leveraged traders scrambling and market watchers closely monitoring liquidity signals.

The jump marks the third sharp move in under 48 hours, pushed by renewed speculation over U.S. President Donald Trump’s proposed $2,000 “tariff dividends” and fresh on-chain data showing an uptick in short-term volatility.

Rising Volatility Reflects Liquidity Testing Phase

Binance data analyzed by Arab Chain shows that Bitcoin’s 7-day realized volatility (RV-7d) has risen to 0.410, well above the 30-day measure of 0.360. This divergence, where short-term volatility outpaces longer-term averages, suggests that the market is entering a liquidity-testing phase, where quick repositioning by traders temporarily unsettles prices without altering the broader trend.

According to Arab Chain, this setup often appears when short-term traders dominate momentum, driving sudden intraday swings, while medium- and long-term investors hold steady, waiting for directional confirmation. In practice, it means that Bitcoin’s recent jumps and dips are being shaped by speculative moves in derivatives and leveraged positions rather than by deep structural shifts in demand.

The data from Binance also indicates that this phase usually comes before major market moves. If the RV-7d continues to rise while the RV-30d remains unchanged, the market could soon face price pressure, with BTC either pushing through upper resistance levels or being pulled back toward new demand zones.

The Arab Chain analysis noted that such short-term bursts in volatility often emerge when traders become more sensitive to headlines or economic signals, which can lead to exaggerated reactions in both directions.

In this case, those signals included the recent political and economic developments in the U.S., where President Trump proposed a $2,000 per-person tariff dividend, reigniting talk of a potential liquidity influx similar to that of the 2020 stimulus era.

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XWIN Research Japan says that today’s market is much better prepared to handle this extra money than it was in 2020, thanks to the growth of spot ETFs, more involvement from big investors, and easy access to crypto through brokerage apps.

Policy Hints and Trader Behavior Shape the Market Outlook

Trump’s comments sparked BTC’s latest rally, with analysts estimating that his plan could inject around $600 billion into the U.S. economy.

At the time of writing, the asset was trading above $106,000, having gained more than 4% in the last 24 hours. However, it remains down roughly 1% for the week and over 8% for the past fortnight, showing the ongoing pressure following its all-time high in early October.

As noted by Arab Chain, if the RV-7d continues to rise without a corresponding rise in the RV-30d, Bitcoin may soon encounter another turning point. Whether that leads to a decisive breakout above $108,000 or a retreat toward $100,000 will depend on how much liquidity the next wave of speculative and institutional capital brings into play.