Bitcoin Stability Indicates Maturation in the Cryptocurrency Market 📉📈
Bitcoin has shown remarkable stability in recent times, with fewer extreme price fluctuations since its fourth halving event. This trend of reduced volatility is seen as a sign of maturity by industry experts.
The Evolution of Bitcoin: A Closer Look at Recent Trends 🧐
- Bitcoin witnessed a slight decline of just over 3% in the past week, with selling pressure dominating across most exchanges.
- Kaiko’s recent findings revealed that major BTC trading pairs had a cumulative net trading volume of $518 million between June 10th and 14th, with Binance and Bybit experiencing the highest level of selling pressure.
According to Kaiko, despite some price fluctuations driven by macroeconomic news, Bitcoin has displayed a new level of maturity in 2024, characterized by decreasing volatility.
Bitcoin’s 60-day historical volatility has consistently remained below 50% since the beginning of the year. This is a stark contrast to the high levels of volatility exceeding 100% seen in 2023.
While 2024 saw Bitcoin reaching an all-time high in volatility, Kaiko noted that this peak was only 40%, significantly lower than the over 106% spike in volatility witnessed in 2021 during price highs.
Impact of Spot Bitcoin ETFs and Increased Competition on Volatility
Even the introduction of spot Bitcoin ETFs in the US had a limited long-term impact on Bitcoin’s volatility, according to Kaiko’s analysis.
“While it’s too early to suggest that this is the new normal, changes to bitcoin’s market structure over the past year may help explain why price action has been relatively ‘boring.’ The US market close now commands a higher share of trading volumes, as BTC liquidity becomes more concentrated around the East Coast trading window.”
Rising Selling Pressure and its Influence on Bitcoin’s Price Action 💰
- The heightened selling pressure, coupled with weaker buying demand, has kept Bitcoin’s price below the $70,000 mark.
- Matteo Greco, a Research Analyst at Fineqia International, pointed out that the weekend price drop was driven by increased selling volumes from miners affected by the third halving event, which halved block rewards from 6.25 BTC to 3.125 BTC.
- Despite a mere 4% decrease in hash rate post-halving, intense mining competition has compelled miners to enhance capital efficiency to remain profitable, indicating a fierce competition in the mining sector.
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