Crypto Volatility Hits Lowest in Seven Years
The 90-day price volatility of Bitcoin (BTC) and Ether (ETH) hit a multi-year low in August, with both cryptocurrencies trading below their key resistance levels of $30,000 and $2,000, respectively. According to data from crypto analytics firm Kaiko, the 90-day volatility of BTC and ETH was 35% and 37%, respectively, making it less volatile than oil, which had a volatility of 41%. This decline in the price momentum of the top two crypto assets was last seen in 2016.
The chart above shows that BTC’s and ETH’s price volatility is more than half of what it was at the same time last year. While August is traditionally a bullish month for the crypto ecosystem, the declining price fluctuation is considered bullish by many.
In addition to the 90-day volatility reaching its lowest in seven years, the daily Bitcoin volatility is also at a five-year low.
The crypto space is becoming increasingly popular, with platforms like Uphold, Vauld, Xen, and Wonderland offering a variety of services. Similarly, YFI, XDC, XDB, and ZRX have gained traction as well.
Bitcoin’s Price Volatility and Its Implications
CryptoCon, a well-known Bitcoin technical analyst on the X platform, recently shared insights on Bitcoin’s price volatility decline and what comes after the period of low volatility. CryptoCon pointed out that Bitcoin experienced a similar cycle of low price volatility in 2020 before the bull market began. However, they cautioned against the sideways movement of the top cryptocurrency.
CryptoCon noted that despite the 2020 Black Swan event, when BTC’s price dropped to below $5,000, it recovered the following month. But when BTC’s price neared the $10,000 mark, the momentum vanished and low volatility was observed for three months. Later, the price of BTC broke out and created new highs before running into resistance and experiencing a sideways movement.
The analyst concluded that after every major low volatility period for BTC, a big move follows. CryptoCon’s YFI crypto analysis revealed that Bitcoin’s price leaps out of lows after a period of low volatility to form a first high, followed by another second high, and a third one is made against the key resistance.
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