- Bitcoin volatility is at an all-time low, according to research director at CoinShares
- BTC Whale Ratio was able to show some recovery
Bitcoin [BTC] continued to disappoint both bulls and bears as its volatility hit fresh lows on Jan. 7th. According to a tweet sent by James Butterfill, Head of Research at CoinShares, BTC’s 30-day volatility fell to an all-time low of 18.7 in the range of popular stock indices like the Nasdaq and S&P 500.
This could be seen as a notable departure from the coin’s unpredictable behavior over the past decade.
1/ Bitcoin 30d volatility is the lowest on record at 18.7, a true milestone and lower than the Nasdaq at 25.7! pic.twitter.com/Em1HLqtfX8
— James Butterfill (@jbutterfill) January 6, 2023
How many BTCs can you get for $1?
The same was reflected in BTC’s trading volumes, which have gradually declined since the FTX-induced bout of market volatility in mid-November. At press time, volume is down nearly 3% since Jan. 6, according to data from CoinMarketCap.
Furthermore, looking at the price chart of BTC, the king coin has been oscillating within a tight range between $16,302 and $17,382 on a daily timeframe. The converging Bollinger Bands (BB) along the mentioned range reinforced the notion of low volatility.
Source: TradingView
Where does BTC go from here?
Analyst Charles Edwards, founder of Capriole Investments, predicted a big move for BTC, but only if it breaks out of low volatility. He shared a chart correlating Bitcoin’s volatility with historical price data and suggested that the new trend tends to last longer after the period of low volatility.
“Bitcoin is currently trading at a major volatility low. When Bitcoin breaks out of extremely low volatility, the ensuing trend generally continues. Don’t buck the trend for the next big step.”
Source: Capriole Investments
In addition, cryptanalyst ‘Crypto Rover’ specified that this period of low volatility will continue for some time.
#Bitcoin volatility is so low…
This is the ultimate bear market signal.
Expect many more low volatility days this year.
— Crypto Rover (@rovercrc) January 6, 2023
Has on-chain activity decreased?
The speed at which coins moved around the network has progressively decreased over the past month. This was consistent with the previous drop in trading volume.
Source: CryptoQuant
In addition, the Exchange Whale Ratio, which fell below 0.4 in the first week of January, showed signs of recovery. The reading of the metric, which measures the top 10 inflows into an exchange, suggested that whales are waiting and watching due to the lack of clear buy and sell signals from the market.
Source: CryptoQuant
The number of open positions remained constant over the past week, giving credence to the low volatility period.
Source: CryptoQuant
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Bitcoin has earned a reputation for being one of the most volatile currencies out there. Buzzwords like “Crypto Wild West” became popular to describe the untamed price fluctuations in the coin’s short history.
However, its volatility has now started to reflect the more traditional financial instruments in the market. Will this strengthen the idea of bitcoin as a legitimate, safe and stable currency going forward? 2023 may have all the answers.
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