Bearish Indicator: Bitcoin Volatility Hits All-Time Low


Bitcoin volatility has been on a decline for the reason that begin of December. This has been a end result of each low curiosity from traders, in addition to the declining costs of digital property out there. It has not led bitcoin to document its lowest volatility stage on document but.

Bitcoin At All-Time Low Volatility

Will Clemente shared a chart on Sunday that confirmed that bitcoin volatility had fallen to an all-time low. The chart itself is fascinating in the truth that it exhibits simply how the bitcoin volatility had been shifting over the previous couple of months.

There have been a number of spikes in volatility from the begin to the center of the yr 2022. Nevertheless, towards the tip, volatility dives off a cliff and continues this downtrend right now. Remember that the volatility of an asset is mainly how a lot the value in {dollars} moved up and down in a given interval. The bigger the motion in worth, the upper the volatility of a coin.

Provided that the value of bitcoin has been kind of regular over the previous couple of months, it tracks that the volatility can be decrease. Then in December, the value of bitcoin had primarily revolved across the $16,000 stage, inflicting volatility to say no.

Bitcoin has barely moved price-wise within the final 7 days, up solely 0.56% on this one-week interval. It’s the lowest that volatility has ever been, and whereas it will usually paint a bullish image for the digital asset, it has invigorated the bears.

BTC stalls at $16,800 | Supply: BTCUSD on

Not A Good Time For BTC

Now, most of the time, when volatility falls to such low ranges, it has been proper earlier than a bull market the place costs had recovered sharply. Nevertheless, the timing of those have additionally mattered significantly as a result of it’s what determines whether or not low volatility is bearish or bullish. 

One of many occasions when low volatility had been very bearish was again in 2018. Like now, the market had simply come out of an explosive bull rally that noticed bitcoin hit new all-time highs. However with such low momentum, it had brought on the value to crash an additional 50%.

Given the similarities of each conditions, it’s possible that this can go because it did in 2018 in comparison with when volatility hit a low in 2020. The bitcoin backside is probably going not in too, which lends credence to this bearish case, though the decline will not be as excessive as 50%. This chart posted by Twitter consumer @DrahoslavP places in perspective simply how volatility has affected the value of the digital asset.

Each time volatility fell beneath worth “1” it was adopted by bullish rally with one exception – october 2018.

— Information Patron (@DrahoslavP) December 25, 2022

Nonetheless, it isn’t all unhealthy information for bitcoin. Actually, wanting over the long run, it’s important for this to occur. Proper after the low volatility and eventual decline in 2018, bitcoin marked the underside of the bear market. This had given strategy to the restoration that will set the tempo for the following bull market.

In different phrases, if a decline follows the present volatility pattern, then it could current the very best alternative for traders to get into the digital asset. For BTC backside chasers, this may very well be the holy grail of backside indicators.

Featured picture from CoinDesk, chart from


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