Alex Dovbnya
Cryptocurrency analysts recently observed that volatility is now lower than ever
According to a tweet from CryptoCommandr, a cryptocurrency trader and on-chain analyst, whenever Bitcoin (BTC) volatility fell below 1, a bullish rally ensued, with one exception – October 2018.
Bitcoin experienced a 50% drop in October 2018, and the data shows that in such a situation, a rally is likely 75% of the time.
Currently, Bitcoin’s volatility is at its lowest point in history and the market seems to be waiting for the next big move.
This scenario reflects the bear market of late 2018. Volatility collapsed in October 2018 before surging again as Bitcoin fell to the low of $3,200 in December 2018, which was the final leg of the previous bear market.
Bitcoin volatility is the degree of fluctuation in the price of bitcoin over time. It reflects how much the price has changed over a period of time, which is usually measured by calculating the standard deviation of logarithmic returns. High volatility indicates that there is significant risk involved in investing in Bitcoin.
The most commonly used measure of bitcoin volatility is the rolling 30-day annualized standard deviation of daily logarithmic returns, ranging from 0 to 1. This calculation is based on past bitcoin price movements.
No floor yet?
CryptoCommandr believes it could be quite a while before the bottom is reached. At press time, Bitcoin is trading slightly above the $16,000 level.
The largest cryptocurrency is down more than 75% from its record high set in October.
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