The volatility index of the most popular of the cryptocurrencies, Bitcoin, is in one of the most important stagnation periods in months. This is the lowest level since November 2020, just before starting the bull-run that brought BTC to the brink of $65K.
The price of Bitcoin, reached high levels in late 2020 and early 2021. Thousands of people around the world invested so as not to be left behind. At that point, volatility loomed over the cryptocurrency, urging that it could at any time, lower its price. The bull markets loaded with volatility tend to suffer significant falls in any circumstance related to the asset in question.
The same can be said, in reverse, of high volatility bear markets. These may resume an uptrend. However, as far as low volatility is concerned, the Bitcoinist portal explains, the chances of going in one direction or another are difficult to predict. In the case of the current state of Bitcoin, he explains that it is on a 50-50 plane of going one way or the other.
What does low volatility mean for Bitcoin?
The fact that the volatility presented in Bitcoin, is the lowest in recent months, is a fact to take into account. For much of the past year 2020, the price remained close to $10 thousand US dollars per currency. Back then, the crypto leader maintained little-seen volatility in a long time.
This period of stagnant volatility was followed by one of the largest rises in the cryptocurrency. The highest price barrier, established in 2017, was widely overcome a short period of time. So strong was the rise after the low volatility period, that now thinking about going back to 20K, would be terrible for many investors.
Currently, the price remains stagnant between $30K and $35K with some sporadic transfers of those lines. At the same time, negative news seems to push the value down as Bitcoin, and with it all cryptocurrencies, struggle to hold on. The latter translates into the low volatility that Bitcoin presents.
It should be noted that, despite punitive measures in China and other attacks, courage has not lost support. At the same time, enthusiasts hope that some positive development will allow Bitcoin to retake the bull-run. Thus, under such a scenario, the pioneering cryptocurrency would enter a new turbulent period of volatility.
Interest in cryptocurrency decreases
An important aspect when it comes to low volatility, is the low interest of the last few weeks in Bitcoin. As Crypto Trend recently reported, the number of active wallets is decreasing considerably.
According to the statistics and analysis portal Glassnode, the loss of prominence in the main media, has diminished the interest of people. Meanwhile, as long as the price of Bitcoin is not breaking news, wallet holders are less likely to decide to invest.
In that sense, Charlie Morris of ByteTree, expressed in CoinDesk: «the momentum cycle is over for now. The market is unable to attract new users at the same pace».
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