Despite what has still felt like a relatively up-and-down period for bitcoin, the world’s number one digital currency by market cap, a new study suggests that the volatility of the asset is at its lowest since 2020.
Bitcoin Volatility is Slowing Down Big Time
The last time bitcoin was this calm was in October three years ago. During that period, bitcoin either didn’t move at all or endured very small maneuvers over 70 separate sessions, and it looks like those patterns are repeating. Strahinja Savic – head of data and analytics at FRNT Financial – commented on the situation and said:
There are a few macro catalysts playing out right now. Whether debt-ceiling negotiations or the Fed rate policy, traders are waiting for more clarity. It’s just a wait-and-see-type of moment.
The news is odd given that in May, for example, bitcoin endured a near $4,000 slide from the $30K price it hit just a month earlier. In April, bitcoin struck a ten-month high, and many felt that the days of 2022 – arguably the worst period on record for the currency – were finally coming to an end.
However, the following month, it was clear that present resistance was still proving to be too harsh an enemy for the world’s leading digital asset. The currency fell into the mid-$26,000 range and only hit $27K briefly after it was announced that Hong Kong would allow certain forms of retail crypto trading through specific (licensed) platforms.
When one looks at data like this, it’s easy to assume that volatility is still relatively constant in the digital currency arena, though it could also be argued that bitcoin has remained almost completely still compared with where it was last year. In her newsletter “Crypto Is Macro Now,” Noelle Acheson explained:
There could be some downside, but conviction in this is not strong enough to offset the possibility of missing out on any rally. Obviously, there is some buying and selling going on, but it is not enough to boost volatility despite the low volumes and liquidity.
2022: The Worst Year on Record!
The good news is that 2023 has offered a degree of healing that many crypto fans and traders likely needed to see before they jumped back into the trading game. The fact is nothing has ever been as damaging as the trends witnessed in 2022, which will probably go down as one of the worst years for bitcoin and crypto.
During that period, the leading digital asset lost more than 70 percent of its value, dropping from $68,000 (an all-time high) in November 2021 to about $16,600 just a year later. Sadly, the trouble didn’t stop there, as several assets chose to follow in BTC’s footsteps and bring the overall valuation of the crypto arena down by more than $2 trillion.
