Bitcoin’s lack of volatility lately isn’t a bad thing and could actually point to signs of a “bottoming out” in prices, analysts and investors told CNBC.

Digital currencies have fallen sharply since a scorching run in 2021 which saw bitcoin climb as high as $68,990. But for the past few months, bitcoin’s price has bounced stubbornly around $20,000 in a sign that volatility in the market has settled.

Last week, the cryptocurrency’s 20-day rolling volatility fell below that of the Nasdaq and S&P 500 indexes for the first time since 2020, according to data from crypto research firm Kaiko.

Stocks and cryptocurrencies are both down sharply this year as interest rate hikes by the U.S. Federal Reserve and a strengthening dollar weighed on the sector.

Bitcoin’s correlation with stocks has increased over time as more institutional investors have invested in crypto.

But bitcoin’s price has stabilized recently. And for some investors, that easing of volatility is a good sign.

“Bitcoin has essentially been range bound between 18-25K for 4 months now, which indicates consolidation and a potential bottoming out pattern, given we are seeing the Dollar index top out as well,” Vijay Ayyar, head of international at crypto exchange Luno, told CNBC in emailed comments.”

“In previous cases such as in 2015, we’ve seen BTC bottom when DXY has topped, so we could be seeing a very similar pattern play out here.”

Antoni Trenchev, co-founder of crypto lender Nexo, said bitcoin’s price stability was “a strong sign that the digital assets market has matured and is becoming less fragmented.”

Cryptocurrencies have suffered a brutal comedown this year, losing $2 trillion in value since the height of the 2021 rally. Bitcoin, the world’s biggest digital coin, is off around 70% from its November peak.

The current so-called “crypto winter” is largely the result of aggressive tightening from the Fed, which has been hiking interest rates in an effort to tame rocketing inflation. Large crypto investors with highly leveraged bets like Three Arrows Capital were floored by the pressure on prices, further accelerating the market’s drop.

However, some investors think the ice may now be beginning to thaw.

There are signs of an “accumulation phase,” according to Ayyar, when institutional investors are more willing to place bets on bitcoin given the lull in prices.

“Bitcoin being stuck in such a range does make it boring, but this is also when retail loses interest and smart money starts to accumulate,” Ayyar said.

Matteo Dante Perruccio, president of international at digital asset management firm Wave Financial, said he’s seen a “counterintuitive increase in demand of traditional institutional investors in crypto during what is a time where generally you would see interest fall off in the traditional markets.”

Financial institutions have continued taking steps into crypto despite the fall in prices and waning interest from retail investors.

Mastercard announced a service that allows banks to offer crypto trading, having previously launched a new blockchain security tool for card issuers. Visa, meanwhile, teamed up with crypto exchange FTX to offer debit cards linked to users’ trading accounts.

Goldman Sachs suggested we may be close to the end of a “particularly bearish” period in the latest cycle of crypto movements. In a note released Thursday, analysts at the bank said there were parallels with bitcoin’s trading in Nov. 2018, when prices steadied for a while before rising steadily.

“Low volatility [in Nov. 2018] was following a large bitcoin bear market,” Goldman’s analysts wrote, adding that “crypto QT” (quantitative tightening) occurred as investors poured out of stablecoins like tether, reducing liquidity. The circulating supply of USD Coin — a stablecoin that’s pegged to the U.S. dollar — has fallen $12 billion since June, while tether’s circulating supply has dropped over $14 billion since May.

Selling pressure has slowed, too, as bitcoin miners reduced their sales of the cryptocurrency, suggesting the worst may be over for the mining space. Publicly-traded bitcoin miners sold 12,000 bitcoins in June and only around 3,000 in September, according to Goldman Sachs.

Wave Financial’s Perruccio expects the second quarter of next year to be the time when crypto winter finally comes to an end.

“We’ll have seen a lot more failures in the DeFi [decentralized finance] space, a lot of the smaller players, which is absolutely necessary for the industry to evolve,” he added.

James Butterfill, head of research at crypto asset management firm CoinShares, said it was difficult to draw too many conclusions at this stage. However, he added, “we err on the side of greater potential for upside rather than further price falls.”

“The largest fund outflows recently have been in short-Bitcoin positions (US$15m this month, 10% of AuM), while we have seen small but uninterrupted inflows into long Bitcoin over the last 6 weeks,” Butterfill told CNBC via email.

The main thing that would lead to greater buying of bitcoin would be a signal from the Federal Reserve that it plans to ease its aggressive tightening, Butterfill said.

The Fed is expected to hike rates by 75 basis points at its meeting next week, but officials at the central bank are reportedly considering slowing the pace of future increases.

“Clients are telling us that once the Fed pivots, or is close to it, they will begin adding positions to Bitcoin,” Butterfill said. “The recent liquidations of net shorts is in sync with what we are seeing from a fund flows perspective and implies short sellers are beginning to capitulate.”