{"id":429420,"date":"2020-07-03T09:34:40","date_gmt":"2020-07-03T09:34:40","guid":{"rendered":"https:\/\/wncen.com\/?p=429420"},"modified":"2024-06-11T14:04:42","modified_gmt":"2024-06-11T14:04:42","slug":"research-bitcoin-volatility-reaches-1-year-low-may-hint-big-move-is-near","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/research-bitcoin-volatility-reaches-1-year-low-may-hint-big-move-is-near\/","title":{"rendered":"Research: Bitcoin Volatility Reaches 1-Year Low, May Hint Big Move is Near"},"content":{"rendered":"
According to Skew, the implied volatility of Bitcoin reached a 1-year low at 46%. The last time BTC\u2019s volatility reached such a low point, a big price movement followed.<\/p>\n
Researchers said<\/a>:<\/p>\n \u201cBTC 1month ATM Implied Volatility reaches a 1-year+ low at 46%.\u201d<\/p><\/blockquote>\n The volatility of Bitcoin last dropped to around 50% in the first quarter of 2020. By the end of the quarter, BTC saw volatility spike to nearly 200%, as its price dropped below $3,600.<\/p>\n <\/p>\n The low implied volatility of Bitcoin can be comprehended in two ways.<\/p>\n First, it might suggest that Bitcoin is in an accumulation phase. From January to April in 2019, the price of BTC remained fairly stable above $4,000. There was little volatility during the four months, and it was followed by a rally to $14,000.<\/p>\n When both retail and institutional investors are in an accumulation phase, the price of Bitcoin can remain less volatile. Historically, an accumulation period is typically accompanied by a prolonged bull market.<\/a><\/p>\n Second, it could hint that Bitcoin is consolidating below a key multi-year resistance level. Bitcoin fell below $9,000 for a total of seven times since May. It continuously rejected $10,000, $9,800, and $9,200<\/a>, three critical resistance levels that held up since 2018.<\/p>\n The lack of volatility at an important price point for Bitcoin might indicate low buying demand to push BTC over a psychological level at $10,000. It might decrease the probability of surging past $10,500, which stopped previous rallies in October 2019 and February 2020.<\/p>\n Technically, if Bitcoin surpasses $10,500 in the near-term, it would indicate a break in bearish market structure. But, the repeated rejection of the same level makes a strong uptrend less likely in the short-term.<\/p>\n <\/p>\n A macro factor that supplements the theory that Bitcoin is in an accumulation phase is the May 2020 halving.<\/p>\n The hash rate of the Bitcoin blockchain network did not see a massive drop after the halving, contrary to expectations. The firm recovery of the hash rate demonstrates the strength and resilience of the mining industry.<\/p>\nThe implied volatility of Bitcoin reaches a 12-month low at 46%. Source: Skew<\/a><\/pre>\n
Low volatility could tell two things about Bitcoin<\/h2>\n
The price of Bitcoin is at a pivotal point after repeated rejection of $10k. Source: TradingView.com<\/a><\/pre>\n
Macro factors that support both scenarios<\/h2>\n