Surprising statistics show that the current rally of the largest cryptocurrency matches historical data. Let’s take a look at what the consulting giant Fool analysts are waiting for now.
Cryptocurrency market gathers volume again
Bitcoin (BTC), which Fool included in his latest report, has been locked in a relatively narrow range of $16,000 to $18,000 for months. This has made the crypto much less volatile than it has been for a while. In fact, Bitcoin’s 30-day volatility has dropped to June 2020 levels. In a five-day period in early January, Bitcoin was actually less volatile than gold, the NASDAQ, and the S&P 500.
This statistic could indicate that a long-term trend of Bitcoin is becoming less volatile over time as it becomes a mainstream risk asset held by both individual and institutional investors. Bitcoin is currently up over 5% over the last 24 hours, supporting this momentum.
Volatility is a statistical metric of how much the value of Bitcoin fluctuates up and down over time. The higher the volatility, the higher the potential volatility. This applies to both plus and minus. As such, Bitcoin’s relatively high historical Volatility means it can make higher highs and lower lows than other assets. In many ways, volatility is key to understanding what makes Bitcoin so unique as an asset.
bullish signal for bitcoin
Fool analysts confirm that this calm before the storm is an important signal for an upcoming Bitcoin bull market rally. Relative volatility compression has only occurred five times in the past, and usually only for a day or two. So the longer this anomaly persists, the stronger the signal can be.
According to traders, there were similar signs at the bottom of the 2018 bear market and just before the start of the 2020 bull market rally. Therefore, if you believe historical precedents, a period of extremely low volatility could be a signal for an explosive rally to the upside. Intuitively, this makes sense. Bitcoin has been stuck in such a narrow trading range for so long that it could be huge when it breaks out.
How permanent is the cryptocurrency rally?
While investors disagree on whether low volatility is positive or negative for Bitcoin, everyone agrees that something is up. Since October when Bitcoin’s volatility hit a two-year low, there have been more stories in the mainstream financial media about Bitcoin’s surprisingly low volatility. After all, it’s newsworthy that Bitcoin is less volatile than the S&P 500. Investors interviewed for these stories typically describe the current Bitcoin landscape as “boring” because nothing seems to be happening. cryptocoin.com We have included the technical forecasts of other analysts in this article.
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