Bitcoin volatility drops to lowest since post-COVID rebound
Data shows that daily Bitcoin volatility has fallen further this week, reaching very low levels not seen in around two years.
Bitcoin 30-day volatility has come down to just 1.9% in recent days
According to the latest weekly report from Arcane Research, 7-day volatility dipped below the 1% mark earlier this week.
“Daily Volatility” is an indicator that measures how the return per day of Bitcoin has differed from the average over a certain period.
Although this period can be of any length, two versions of the metric are particularly natural, 7-day volatility and 30-day volatility.
Now, here is a chart that shows the trend in these daily Bitcoin volatilities, as well as the daily returns in the price of the crypto, over the past year.
Looks like the values of the two metrics have been quite low in recent days | Source: Arcane Research's The Weekly Update 41, 2022
As you can see in the graph above, Bitcoin volatility has been trending down in recent weeks as the price of the coin has been stuck in consolidation.
The 7-day version of the indicator broke below the 1% level recently, before forming a low there and rebounding back to today’s 1.1% level.
This trough was the lowest level the metric has seen since July 2020, when the post-COVID crash decline took place.
30-day Bitcoin volatility is also at an all-time low at the moment, as the indicator’s value is only 1.9% right now.
The report notes that while these volatility values suggest a completely stale price recently, it has also been true that the crypto has seen some intraday activity, which the indicator does not take into account as it only takes the daily closing prices.
The price of Bitcoin fluctuated by almost 9% in 12 hours on Thursday when the US CPI release was published. But this price change was almost completely gone by the time the daily close occurred.
Historically, periods of very low volatility have now been followed by violent price movements. It now remains to be seen whether BTC observes a similar trend this time as well or not.
BTC price
At the time of writing, Bitcoin’s price is hovering around $19.1k, up 4% in the last week. Over the past month, the crypto has lost 2% in value.
The chart below shows the BTC price trend over the past five days.
The value of the crypto seems to have continued to consolidate during the last few days | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Arcane Research
