Too Quiet? Bitcoin Volatility Hits Record Low - U.Today

BTC0,58%

Fidelity Digital Assets has noted that Bitcoin’s volatility has plunged to the lowest level ever

“Realized volatility” measures how much an asset’s price fluctuates over a specific period (in this case, one year). A score of 42% is exceptionally low for Bitcoin, which has historically seen annual volatility exceeding 100% or even 200% in its early years.

In plain words, Bitcoin is currently “boring.” This “uncharacteristic” calm suggests Bitcoin is losing its “casino” status. It is trading within a tighter range than usual, without the violent 20-30% daily swings that characterized previous cycles.

However, it is worth noting that volatility tends to be cyclical in financial markets. It transitions from periods of high turbulence to low stability. A drop to 42% indicates extreme compression, which is comparable to a spring being coiled tight.

A new all-time high?

Fidelity Digital Assets has identified a rare and historically bullish signal: Bitcoin has become unusually stable

It illustrates a technical phenomenon where periods of all-time low (ATL) volatility (red bars) act as a precursor to all-time high (ATH) Prices (green bars).

For instance, the low volatility of 2016 preceded the 2017 bull run to $20,000.

The chart shows a fresh cluster of red bars appearing right now. Fidelity’s argument is that this current period of stability is a sign of accumulation that is building energy for a move to new highs.

Bitcoin is currently trading at $90,789, struggling to recover from a recent drop. The cryptocurrency recently failed to surpass the $95,000 level

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