• Bitcoin’s 7-day volatility has dropped to its lowest level in 2.5 years, sitting at a value of 0.7%.
• Arcane Research’s latest report showed that the 7-day and 30-day Bitcoin volatility metrics have sharply declined in recent weeks.
• Trading during highly volatile periods involves more risk than in times of stale price action.
The latest weekly report from Arcane Research has revealed that Bitcoin’s 7-day volatility has dropped to its lowest level in 2.5 years, sitting at a value of 0.7%. The “volatility” here is a metric that measures the deviation in the daily returns for Bitcoin from the average over a specified period, usually 7 days or 30 days. When the value of the indicator is high, it means Bitcoin is observing large fluctuations compared to the average recently. Low values suggest the price of the crypto is not showing many returns in recent days.
The report also showed that both the 7-day and 30-day Bitcoin volatility metrics have sharply declined in recent weeks as the crypto’s price has been stuck in endless consolidation. This means that trading during highly volatile periods involves more risk than in times of stale price action. It is important to note that there is a risk associated with any type of investment, and crypto traders should always exercise caution and do their own research before investing.
To help crypto traders better understand the current state of the market, Arcane Research has provided a chart that shows the trend in the 7-day and 30-day Bitcoin volatilities over the past year. The values of the two metrics have steadily declined over the past few weeks, indicating that the market has been relatively calm and stable compared to previous periods.
The Arcane Research report also discussed the potential implications of Bitcoin’s low volatility. While some traders may be happy to see a stable market, others may be concerned that the lack of movement is a sign of a potential bear market. However, it is important to remember that Bitcoin is still a relatively new asset and that volatility is to be expected.
Overall, it appears that the Bitcoin market is in a period of relative stability. While this may be a welcome change for some traders, it is important to remember that the market could still swing in either direction. Therefore, traders should always exercise caution and do their own research before investing.