Bitcoin Volatility Drops To Lowest Since Post-COVID Rebound

Data show that daily Bitcoin volatility has fallen further this week, reaching very low levels not observed in nearly two years.

Bitcoin’s 30-day volatility recently dropped to just 1.9%

According to Arcane Research’s latest weekly report, seven-day volatility dipped below 1% earlier in the week.

“Daily volatility” is a metric that measures how Bitcoin’s daily returns differ from the average over a given time period.

This period can be of any length, but two versions of the metric are particularly natural: 7-day volatility and 30-day volatility.

Well, here’s a chart showing these daily Bitcoin volatility trends and daily returns for the crypto price 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 from the graph above, Bitcoin volatility has been on a downward trend over the past few weeks as the price of Bitcoin clings to consolidation.

The 7-day version of the indicator has formed a low there and rebounded to the current 1.1% level after falling below the 1% level recently.

This trough was the lowest level in the metric since July 2020, around the time of the rebound after the COVID crash.

Bitcoin’s 30-day volatility is also at a historically low level, with the indicator currently at just 1.9%.

While the report suggests that these volatility values ​​are completely old prices these days, it is also true that cryptocurrencies are looking at intraday activity, which only uses daily closing prices, hence the indicator points out that it does not take into account

Bitcoin’s price fluctuated nearly 9% in the 12 hours on Thursday as the US CPI release was made public.

Historically, periods of very low volatility, such as the current one, have been followed by periods of intense price movements. Whether BTC will observe a similar trend this time remains to be seen.

BTC price

At the time of writing, Bitcoin’s price is hovering around $19.1 thousand, up 4% in the last week. Over the past month, the value of cryptocurrencies has fallen by 2%.

The chart below shows the trend of BTC price over the last 5 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