• Bitcoin 7-day volatility has reached a low of 0.7%, the lowest observed since July 2020, two and a half years ago.
• This is according to the latest weekly report from Arcane Research, which shows that both the weekly and monthly Bitcoin volatilities have sharply declined in the last few weeks.
• Low volatility suggests that the price of the crypto hasn’t been showing many returns in recent days.
The crypto market has been observing a period of relative calm, with Bitcoin’s price stuck in endless consolidation. According to the latest weekly report from Arcane Research, the BTC volatility has sharply declined recently and the 7-day version of the metric currently has a value of 0.7%, the lowest observed since July 2020, two and a half years ago.
The “volatility” here is a metric that measures the deviation in the daily returns for Bitcoin from the average over a specified period. This rolling average period can be of any length, but the most useful versions of the metric are the ones taken over 7 days and 30 days. When the value of the indicator is high, it means BTC is currently observing large fluctuations compared to the average recently. On the other hand, low values suggest the price of the crypto hasn’t been showing many returns in recent days. As a result of this low volatility, trading during these periods involves less risk than in ones with more volatile price action.
The graph provided by Arcane Research’s “Ahead of the Curve” report demonstrates the trend in the 7-day and 30-day Bitcoin volatilities over the past year. It is clear that both the weekly and monthly Bitcoin volatilities have sharply declined in the last few weeks. This low volatility suggests that the price of the crypto hasn’t been showing many returns in recent days.
Investors who are in the market for the long-term may be pleased to see that the market is taking its time and is not making any drastic moves. However, traders who are more active in the market may be seeking more volatility and return on their investments.
While the current low volatility may seem like a blessing to investors, it is important to note that Bitcoin is a highly volatile asset and its price could quickly shift in either direction. As such, investors should remain vigilant and monitor their investments closely to ensure they are not exposed to too much risk.