Bitcoin’s volatility evolution: From extreme swings to stable ground

Post­ed: Sep­tem­ber 18, 2023

• Bit­coin has not wit­nessed a sin­gle day with volatil­i­ty over 150% in the cur­rent halv­ing cycle.
• BTC has main­tained the $26,000 price range despite the slight declines.

Bit­coin [BTC], along with many oth­er cryp­tocur­ren­cies, has faced alle­ga­tions of extreme volatil­i­ty and the asso­ci­at­ed risk of hold­ing it. Recent­ly, data has pro­vid­ed an answer to the ques­tion of its volatil­i­ty when com­pared to con­ven­tion­al assets.

Read Bit­coin (BTC) Price Pre­dic­tion 2023–24

Bitcoin sees less extended volatility

A recent post from Ecoino­met­rics revealed that Bit­coin exhib­it­ed decreas­ing instances of extreme volatil­i­ty fol­low­ing each of its halv­ing events. The report high­light­ed that in the first halv­ing cycle, it had over two months with volatil­i­ty exceed­ing 150% with­in a one-month timeframe. 

In the sec­ond halv­ing cycle, this peri­od reduced to approx­i­mate­ly one month with such ele­vat­ed volatil­i­ty. Remark­ably, in the cur­rent halv­ing cycle, BTC has not wit­nessed a sin­gle day with volatil­i­ty sur­pass­ing 150%.

Source: Ecoino­met­rics

These volatil­i­ty events sig­ni­fied that while Bitcoin’s aver­age volatil­i­ty remained rel­a­tive­ly high, it has ceased to under­go extend­ed peri­ods of extreme volatil­i­ty. Ecoino­met­rics draws a com­par­i­son, sug­gest­ing that BTCs volatil­i­ty is now sim­i­lar to that of NVIDIA or Tesla.

Bitcoin’s 4‑week volatility metric

Recent data from San­ti­ment indi­cat­ed that Bit­coin has indeed expe­ri­enced notable price volatil­i­ty in the past few months. This met­ric revealed sig­nif­i­cant fluc­tu­a­tions in volatil­i­ty, although these fluc­tu­a­tions have gen­er­al­ly not per­sist­ed for extend­ed dura­tions, as not­ed in the Ecoino­met­rics post. 

As of this writ­ing, the price volatil­i­ty score was approx­i­mate­ly 0.017%. The high­est lev­el of volatil­i­ty observed over five months reached 0.07%.

Source: San­ti­ment

BTC’s price trend

On the Bit­coin dai­ly time­frame, the Bollinger Band indi­cat­ed some price volatil­i­ty in the past cou­ple of months. How­ev­er, this volatil­i­ty has not been sus­tained over an extend­ed peri­od. As of this writ­ing, the band was dis­play­ing low volatil­i­ty, with a range between $25,000 and $27,000.

Also, over the last two days, there have been slight declines in Bitcoin’s price, but it has man­aged to hold around the $26,000 lev­el. As of this writ­ing, it was trad­ing at approx­i­mate­ly $26,500.

Source: Trad­ingView

How much are 1,10,100 BTCs worth today

These slight declines have kept the short and long Mov­ing Aver­ages intact as resis­tance levels.

Fur­ther­more, the price drop has caused BTC to dip slight­ly below the neu­tral line on its Rel­a­tive Strength Index (RSI), although this change may not be imme­di­ate­ly apparent.