Bitcoin Volatility Drops To Its Lowest Level Since 2020: Experts Explain The Reason
According to the analyzed data, the volatility of Bitcoin’s price appears to have decreased to levels last seen in 2020.
Based on data compiled by Bloomberg, Bitcoin (BTC) is currently experiencing its longest period of low volatility since October 2020. Over the past 70 trading sessions, it has not recorded a daily movement of more than 6%.
After consistently experiencing upward momentum in the first four months of the year, Bitcoin is showing a slight decline in May.
This situation is considered unusual for Bitcoin, which is typically known for its significant and sudden movements that can often reverse the next day.
Strahinja Savic, the Director of Data and Analysis at FRNT Financial, commented on the matter by saying:
“At the moment there are few macro uses such as debt limit negotiations or FED rate policy, traders are waiting for more clarity. It’s just a wait-and-see period right now.’
According to Noelle Acheson, owner of the “Crypto Is Macro Now” newsletter, while the upside potential for Bitcoin is significant, even on a risk-adjusted basis, there is no compelling reason for investors to pile on crypto right now
Acheson added that there is not much reason for existing crypto holders to sell, and investors are waiting to see how things turn out in the macro background:
“There may be some downside, but our belief in this is not strong enough to justify the possibility that it will miss a rally. Of course there is some buying and selling, but not enough to increase volatility despite the low volumes and liquidity.”
It is not investment advice.