Bitcoin, often criticized for its perceived volatility and associated risks, has shown notable shifts in its price behavior. Recent data reveals a decrease in instances of extreme volatility following each halving event, highlighting a trend towards more stable price movements. This article explores Bitcoin’s evolving volatility in comparison to conventional assets.
Decreasing Instances of Extreme Volatility: According to a report from Ecoinometrics, Bitcoin’s volatility has witnessed a decline after each halving event. In the first halving cycle, there were over two months with volatility exceeding 150% within a one-month timeframe. In the second cycle, this period reduced to approximately one month. Remarkably, in the current halving cycle, Bitcoin has not experienced a single day with volatility surpassing 150%. While its average volatility remains relatively high, extended periods of extreme volatility have become less frequent, aligning its behavior with that of companies like NVIDIA or Tesla.
Bitcoin’s 4-Week Volatility Metric: Recent data from Santiment indicates notable price volatility for Bitcoin in recent months. While fluctuations have occurred, they have generally not persisted for extended durations, consistent with the findings from Ecoinometrics. As of the latest data, the price volatility score stands at approximately 0.017%, with the highest observed level over five months reaching 0.07%.
BTC’s Price Trend: Analyzing Bitcoin’s daily timeframe, the Bollinger Band reveals some price volatility over the past months, though not sustained over an extended period. Currently, the band displays low volatility, indicating a price range between $25,000 and $27,000. Despite slight declines in the last two days, Bitcoin has managed to maintain a level around $26,000, trading at approximately $26,500. These minor fluctuations have kept the short and long Moving Averages intact as resistance levels. Additionally, a slight dip below the neutral line on the Relative Strength Index (RSI) has occurred, though this change may not be immediately evident.
Conclusion: Bitcoin’s volatility trends in the current halving cycle suggest a shift towards more stable price movements. The decrease in instances of extreme volatility reflects a maturing market, potentially making Bitcoin a more attractive investment option for risk-averse investors. As the cryptocurrency landscape continues to evolve, monitoring these trends will provide valuable insights for market participants.