Bitcoin’s Ten-Day Realized Volatility Falls By 20%; Imminent Sell Off Ahead?

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Cryptocurrencies are extremely volatile in nature. Over the years the volatility of Bitcoin has been depreciating. However, its impact on the crypto market and the price of the coin are under the limelight in anticipation of a potential breakout. 

Will Bitcoin’s Low Volatility Rouse The Bears?

Bitcoin has garnered several fans from different walks of life. While some viewed the king coin as gamble a few others saw it as a medium of financial freedom. However, a few others including government officials discerned Bitcoin as an extremely volatile asset. Individuals who have found crypto assets to be interesting have been taken aback by the extremely volatile nature of these assets. However, the volatility of the world’s largest cryptocurrency, Bitcoin has witnessed a slump. The volatility of Bitcoin has been depreciating since April 2020 when the volatility of the king coin was at a high of 10.86 percent. At the time of writing, Bitcoin’s volatility was at a yearly low of 1.49 percent.

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The volatility of Bitcoin witnessed a similar slump back in September 2019 during the release of Bakkt. The price of the coin fell from the 9K zone to the 7K zone in a period of one month.

Imminent Sell-Off Ahead?

As per the online analytics platform, Skew, the ten days realized volatility of Bitcoin was down by 20 percent. While the one-month realized volatility witnessed a dip of 35 percent, Skew hinted at a repeat of history. 

Source – Skew

The infamous crypto crash in 2018 caused carnage in the cryptocurrency market. In November 2018, the price of Bitcoin dropped to a low of $3,713 during the month. Skew further indicated that the last time the realized volatility of Bitcoin hit this level, the November sell-off took place in full swing.

Low Volatility = High Levels Of HODL-ing?

The volatility of Bitcoin has been depreciating since April 2020. This further indicates the inactivity of traders. CoinGecko’s latest report highlighted that the trading volume of Bitcoin went down by 20 percent during the second quarter of 2020.

Furthermore, Glassnode’s CTO recently shared a tweet revealing that only 27 percent of circulating Bitcoin supply was moved in 2020, while the other 73 percent of the Bitcoins in existence were untouched since 2019.

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Previous records of Bitcoin’s volatility strongly indicate a potential bear cycle. At the time of writing, the king coin was trading at $9,198 with a 1.85 percent increase in price.