Bitcoin’s Volatility: Is Stability on the Horizon?
Bitcoin’s notorious volatility seems to be at an all-time low, raising questions about the future of its price stability. Historical data suggests that periods of low volatility are often followed by significant price movements. Here are the key points from a recent report by Glassnode:
- Bitcoin’s current low volatility is reminiscent of previous cycles, which experienced a period of sideways movements before a market acceleration.
- Bitcoin’s realized volatility has dropped dramatically, reaching multi-year lows.
- Price performance has moderated after the initial surge, transitioning into a phase of re-accumulation.
- The price range for Bitcoin has tightened significantly, with trading ranges at historical lows.
- The derivatives market, an indicator of sentiment, is also experiencing low trade volumes and a volatility crush.
The report raises the question of whether Bitcoin is entering a new era of stability or if volatility is being mispriced. While technical indicators suggest a prolonged period of low volatility, only time will tell if stability is here to stay.
Hot Take: Bitcoin’s current low volatility may be a sign of a calm before a storm, with significant price movements on the horizon. However, technical indicators point to a continued period of re-accumulation, indicating that low volatility could persist for some time.
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