Tag: Bitcoin Volatility

Bitcoin Volatility Drops To 15 Month Low; What This Could Mean

by NEWSBTC

Is this the calm before the storm? Bitcoin volatility is seldom this steady. After a tumultuous downturn that had the whole market upside down, bitcoin’s fiat price is relatively flat. Everyone can breathe and rest, for a while at least. What does this mean and how long will it last, though? That’s what we’re here to explore. 

Related Reading | Dwindling Bitcoin Volatility Could Lead To Decisive Move

It’s no secret that the market was expecting a hike in the interest rates, and thus people were selling risky assets. However, the powers that be postponed the increase, and, well, the market calmed down. During this downturn, though, Bitcoin proved once again that the market considers it the least risky asset in the cryptocurrency space. Everyone bled, but Bitcoin considerably less so.

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In any case, back to volatility, Arcane Research’s The Weekly Update has the scoop: 

“Bitcoin’s 7-day volatility is now at the lowest level since November 2020. Together with the trading volume, the volatility exploded last week when bitcoin dropped below $40,000. After bottoming at $33,500, the bitcoin price has been slowly grinding upwards, and it looks like the market has released sufficient pressure for now. Still, we might see new volatility peaks soon as bitcoin trades closer to several key resistance and support levels that might be catalysts for increased volatility.”

The pressure is off, but, the steadiness might not last. If there’s one thing we can count on in regards to bitcoin is this: volatility will return sooner than later, for better or worst. 

Bitcoin volatility - The Weekend Update

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BTC/ USD Volatility | Source: Arcane Research’s The Weekly Update

What Are The Resistance And Support Levels?

Bitcoin “has been slowly grinding upwards,” and it’s getting close to that magical number 40. Again, The Weekly Update:

“$40,000 is a key resistance level. With BTC’s slow grind upwards lately, we could see BTC testing this resistance level shortly. A breakthrough would be a relief for the bulls and could signal a trend reversal.”

On the other hand, if things go south and the market starts bleeding again, there’s another number that we have to be aware of:

“Towards the downside, $32,500 acted as support during the initial sell-off, but $29,000 remains as the most critical support level. A breakout below $29,000 would be unsettling, which could cause havoc in the market.”

If Bitcoin touches 40 or 29, the boat might start to rock. Fasten your seatbelts and be sure to wear a life jacket.

BTCUSD price chart for 02/0/2022 - TradingView

BTC price chart for 02/01/2022 on Bitstamp | Source: BTC/USD on TradingView.com

What Causes Bitcoin Volatility?

The short answer is supply and demand. However, since the Bitcoin economy is still small compared to the world’s, several factors can upset or propel the price. From any kind of news to influencers’ opinions to regulation talk or concrete action to whales dumping on the market to interest rates hike rumors. Anything. Also, take this Investopedia insight into account:

“Bitcoin has only been around for a short time—it is still in the price discovery phase. This means that prices will continue to change as investors, users, and governments work through the initial growing pains and concerns until prices stabilize—if a stable point can be reached.”

Related Reading | This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near

Yes, Bitcoin is the largest cryptocurrency by far and Fidelity thinks it “should be considered first and separate from all other digital assets that have come after it.” However, the asset is still a wild teenager. Expect volatility and learn how to deal with it. It’s going to be a bumpy ride.

Featured Image by Pexels on Pixabay | Charts by TradingView

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Weekend Volatility Awakens Bitcoin Buyers, Active Addresses

by NEWSBTC

Following the volatility of the weekend, Bitcoin holders seem to have woken up as active addresses break one million.

Number Of Active Bitcoin Addresses Reach Seven-Month High

As per the latest weekly report from Arcane Research, the crash during the weekend woke up sleeping Bitcoin investors as the number of active addresses observes a significant increase.

The “number of active addresses” is a Bitcoin indicator that measures the amount of addresses that showed some activity on the chain during a particular day.

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If an addresses makes more than one move in a given day, the metric still only counts it as one active address. Because of this, the indicator may tell us an accurate picture about how many BTC holders shifted their coins that day.

When the number of active addresses rise in value, it means market activity is going up, and previously dormant addresses could be coming back up. This trend is usually seen around periods of high volatility.

On the other hand, when the indictor’s value goes down, it implies there aren’t many holders making moves. Such a trend may mean that investors are currently waiting to see the price make moves before they shift their positions. It may also simply be because of a lack of interest in the market at the time

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Related Reading | Ethereum Strength Sends Bitcoin Ratio To 2018 Highs

Now, here is a chart that shows the trend in the value of the number of active addresses over the past year:

Bitcoin Active Addresses

Looks like the value of the indicator has been moving up for a while | Source: The Arcane Research Weekly Update - Week 48

As the above graph shows, the number of active Bitcoin addresses saw a sharp spike recently. The crash in the crypto’s price during the weekend was responsible for this sudden rise in the metric’s value.

Currently, the indicator’s value is above 1 million, the highest it has been in the past seven months. The last time higher values were seen was back in May, following the crash.

Related Reading | Majority Of Bitcoin Investors Got In This Year, Says Grayscale

As the market cooled down, there were only about 750k active addresses left by July. Since the bottom in that month, the indicator has been gradually rising in value.

It’s yet unclear if the current high values will continue to rise, or if the indicator’s value will once again drop down as the market calms down from the weekend’s volatility.

BTC Price

At the time of writing, Bitcoin’s price floats around $49k, down 24% in the last month. The below chart shows the trend in the price of BTC over the past five days.

Bitcoin Price Chart

BTC still in consolidation? | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

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Bank of Japan governor slams Bitcoin, calls BTC a speculative asset

by Cointelegraph

Haruhiko Kuroda, governor of the Bank of Japan has joined the roll call of central bankers taking aim at Bitcoin (BTC) amid the current volatility.

According to a report by Bloomberg on Friday, Kuroda argued against the value proposition of the largest crypto by market capitalization, stating:

“Most of the trading is speculative and volatility is extraordinarily high. It’s barely used as a means of settlement.”

The BOJ governor’s criticism comes as Bitcoin experienced an over 50% drawdown from its $64,000 all-time high price milestone achieved back in mid-April.

Indeed, several central bankers have taken Bitcoin’s current price wobble as an occasion to slam BTC and cryptocurrencies in general.

Earlier in May, Luis de Guindos, vice president of the European Central Bank also expressed negative sentiments about Bitcoin. As previously reported by Cointelegraph at the time, the ECB executive argued that cryptocurrencies had weak fundamentals and did not qualify as a real investment.

Recently, Lars Rohde, governor of Denmark’s central bank, dismissed the possibility of cryptocurrencies posing a threat to central bank autonomy. According to Rohde, big tech and not crypto is the real competitor to gatekeepers of the legacy finance arena.

Also in May, Andrew Bailey, governor of the Bank of England warned that crypto investors were liable to lose all their money. However, as tweeted by PlanB, creator of the Bitcoin stock-to-flow model, long term BTC “hodling” — owning Bitcoin for at least 200 weeks (four years) — never resulted in a loss position for owners.

In fact, despite Bitcoin’s 50% decline since mid-April, BTC is still up about 22% year-to-date and has returned four-fold gains for holders over the last year. Billionaire hedge fund manager Ray Dalio has even tipped Bitcoin to be a better savings instrument than government bonds.

Apart from slamming Bitcoin, Kuroda also echoed the sentiments of other central bankers concerning the potential viability for stablecoins as long as their issuers conform to strict regulatory protocols.