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Bitcoin’s Low Volatility Level A Calm Before Storm

Bitcoin’s volatility level has dropped more than 18-month low according to bitvol.info’s index. The platform uses the CoinDesk and the BitStamp APIs for querying historical Bitcoin data and opening price. The index puts the 30-day BTC/USD volatility at 1.71%, a range which was last seen in May 2017. From this point, the consolidation could go sideways – but most likely upwards.

Bitcoin’s volatility level over time (bitvol.info)

Bitcoin’s volatility level over time (bitvol.info)

Volatility level measures how Bitcoin’s price varies over time focusing on the size of its value change and the uncertainty or risk that goes with it. A lower volatility means Bitcoin’s value does not fluctuate dramatically, but changes in value at a steady pace over a given period.

Going by current market view, some of the indications that the low volatility tends to point to an upward market direction include the decreasing sell walls on key exchanges. It seems to signal the end of the downturn which has taken over the market since the beginning of the year hence the drop in sell-offs. The fact that Bitcoin has been shorted too much of late in the bear period exposes regular traders to the risk of unfavorable reward ratio which could result in losses if Bitcoin price picks up suddenly.

Past performances are never always an accurate indicator of future expectation in the crypto market especially as fundamentals have changed and exposure level has improved with time. However, some of the significant infrastructures that have been built in the past nine months are yet to yield any result. It gives insightful market insiders a reason to be positive about an upward push hopefully with the involvement of institutional investors between now and next year.

The low volatility level could also be getting a favorable attention from the U.S. Securities and Exchange Commission (SEC). The regulator may consider Bitcoin’s calmer price fluctuation – as a possibility given the right environment – in its review of ETF applications before it. There are projections that the approval of Bitcoin ETFs will bolster the entire crypto market by attracting new Investments.

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