21. Juli 2024

Bitcoin: this rally is „much quieter“ than the previous ones

Bitcoin currently has much less volatility than previous bull runs.

This lower volatility could indicate greater stability and confidence in the BTC price.

The price of Bitcoin increased by nearly 300% over the year.

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The year 2020 was an important year for Bitcoin. Although the world has faced many global challenges, such as a widespread pandemic and extreme economic tensions, Bitcoin remains committed to its mission of protecting against inflation and centralized power.

Bitcoin was on the rise before the start of the pandemic, but these global problems, combined with the inflation of various governments around the world, highlight the need for a decentralized and deflationary currency such as the BTC.

The market’s first crypto-currency is still widely regarded as a highly speculative asset. This is indeed still the case, but more and more people are beginning to understand why Satoshi Nakomoto created a currency not managed by the central bank.

This time, Bitcoin’s volatility is lower.

This year, Bitcoin experienced another unparalleled rise, as the closing candles of the previous weeks marked one of the highest prices in the company’s history.

According to the data collected by Skew, Bitcoin did not experience the level of volatility seen in previous bull runs, despite a large increase in value by BTC.

A quiet rally: despite all the attention received and a powerful $10,000 to $20,000 rally in the fourth quarter, #bitcoin did not experience its usual explosion in volatility.

When we look at the Skew chart that maps the volatility of the asset, except for one point of confusion, Bitcoin remained below the 100% relative volatility, which we had never seen before. Bitcoin’s realized volatility for the past year is 79%, and only 53% if we analyze only the last three months.

Comparing these figures to the crypto bull run of 2017-2018, we can see that volatility during this period has reached a peak of 200%. Similarly, it was well above 100% relative volatility for most of the year.

What does this reduced volatility mean?

Lower volatility in a market normally indicates greater stability and confidence in the asset price.

This reduced volatility may therefore indicate greater confidence in the current price of Bitcoin, since there is less skepticism in the market. It is this same skepticism that has led to the high volatility of Bitcoin in the past.

BTC Bitcoin Bull

With institutional investors clearly becoming involved at an increasingly rapid pace, this could provide a partial explanation as to why the market is less volatile.

In general, if institutional investors buy Bitcoin as part of their cash assets, they do not plan to sell in the short term. This could likely help to consolidate the market price and reduce overall volatility.