Bitcoin Volatility Index Hits Near-Record Low

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In Brief
  • According to one metric, bitcoin's 30-day volatility (vol) has hit a near-record low.

  • High vol typically follows low vol, but it doesn't necessarily suggest the next direction of the trend.

  • Market analyst Willy Woo believes the reading is bullish for bitcoin.

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According to one metric, bitcoin’s 30-day volatility has hit a near-record low, recording a standard deviation of only 0.85%.



The last time the alpha crypto was this stable was in Jan 2013 and April 2016, before it went on unprecedented runs to achieve several 1000% gains, all in the space of a year (or two).

In simplest terms, volatility measures the change in the price of an asset over a specific period. Most pundits will, by now, know that bitcoin has high volatility compared with most traditional assets.

However, ‘Buy Bitcoin Worldwide’ notes that even that century-old safe-haven hedge, gold, averages around 1.2%, though, it’s unclear whether that’s also a 30-day reading.

The 30-day bitcoin volatility index tanks to new low | Source: buybitcoinworldwide.com

As seen above, low volatility typically leads to high volatility, but it doesn’t necessarily indicate the direction of the next trend.



Queue the Bitcoin Bulls

That didn’t stop prominent crypto market analyst, Willy Woo, from predicting an incoming bull market. Woo, who “builds models, not price targets,” theorizes that the current hodling pressure will inevitably lead to a capitulation of the bears:

BeInCrypto reported this low volatility phenomenon earlier on in the year, noting the price carnage that followed. Nevertheless, Woo is adamant that buyers are propping up the price:

Note that volatility reaching lows also means buyers have laid down a floor on spot markets as they accumulate, this stops downward moves and lowers volatility. (accumulation bottoms).

Bitcoin has, after all, remained above $10,000 for a record number of days, a sign that crypto bulls often use to indicate heavy accumulation and a calm before the storm.

Woo also speculates that this is the perfect environment for whales to get in on the action:

@michael_saylor saw this effect as they mopped up $425m of coins.

Saylor, who is the head of Microstrategy, made an unprecedented investment in the leading crypto in August. He believes that gold’s paltry volatility will be no match for bitcoin when that storm finally returns.

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Ryan is BeInCrypto's U.S. Time Zone Editor. He's fascinated with the history and evolution of money and the role that crypto has to play in fixing a broken financial system. When not meticulously looking over the charts, he can be found jamming some board games or running the trails in his local nature reserve.

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