Bitcoin surged to a fresh all-time high of $124,500 just hours ago, but the celebration was short-lived as the price quickly retraced to the $121,500 level. The sudden pullback has split market opinion: some analysts interpret the drop as a sign of waning momentum, while others see it as a healthy pause before another breakout attempt.Adding to the intrigue, key data from CryptoQuant reveals that BTC volatility — measured by the 30-day Price High & Low metric — has compressed to its lowest point in two years. This metric tracks the range between Bitcoin’s rolling 30-day high and low, and its current tight squeeze suggests a rare balance between supply and demand. Liquidity has been clustering above local highs near $120K and below recent lows around $113K, creating a coiled-spring effect in the price structure.Historically, such volatility compression phases often precede significant range expansions. The question now is whether Bitcoin will break upward, continuing its long-term bull trend, or slip into a deeper correction if selling pressure gains traction. With the market sitting near record highs and volatility at multi-year lows, traders are bracing for what could be the next decisive move in Bitcoin’s 2025 rally.Bitcoin Volatility Compression Signals Imminent MoveAccording to top analyst Axel Adler, Bitcoin’s 30-day Price High & Low metric is showing one of its tightest readings in years. The range between BTC’s rolling 30-day high and low has narrowed significantly, while the bands themselves — representing the rolling maximum and minimum prices — have compressed tightly around the current price. This pattern is a textbook sign of volatility contraction.Adler explains that such compression typically reflects a balance between supply and demand and a period of low realized volatility. In this phase, liquidity tends to concentrate just above local highs, currently around $120,000, and just below local lows, near $113,000. This creates a situation where price movement is contained within a narrow band, with traders positioning themselves on both sides in anticipation of the next breakout.The coming days will be critical in determining Bitcoin’s short-term structure. If BTC can break above the $120K–$124K zone, it could trigger another leg higher in its uptrend. However, a breakdown below $113K would increase the risk of a deeper correction, potentially shifting market sentiment.Price Analysis: Testing Critical Resistance ZoneOn the 8-hour chart, Bitcoin (BTC) is trading at $121,596, down slightly by 0.14% after hitting $122,609 earlier in the session. The move comes just a day after BTC briefly broke above the key $123,217 resistance level, approaching the $124,000 psychological barrier before pulling back. This zone remains the most significant obstacle for bulls, as it has capped upward moves multiple times.Price action shows BTC maintaining a bullish structure above its major moving averages — the 50 SMA ($116,948), 100 SMA ($117,653), and 200 SMA ($112,495). This alignment signals continued strength in the medium term, with the 50 SMA acting as immediate dynamic support.The repeated tests of the $123K area suggest that market liquidity is heavily concentrated here. A decisive breakout and sustained close above $124K would likely trigger momentum buying and open the door to new all-time highs. Conversely, a failure to reclaim $123K could lead to renewed selling pressure, with initial support at $120K and deeper support near the $117K–$118K range.Featured image from Dall-E, chart from TradingView