- BTC’s annualized volatility fell to ranges final seen in December 2016.
- Nonetheless, Glassnode reported that this was not a brand new phenomenon.
Notorious for the numerous volatility in its value, the previous few months have been marked by volatility compression for the main coin Bitcoin [BTC], Glassnode present in a brand new report. With most BTC buying and selling classes marked by “quietness,” “fewer than 5% of buying and selling days have a tighter commerce vary,” the on-chain analytics agency famous.
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Mum says the market
In keeping with Glassnode, BTC’s annualized volatility has steadily declined this yr. Noticed throughout the 1-month to 1-year window interval, this has fallen to ranges final seen since December 2016.
Noting that this isn’t a brand new phenomenon, Glassnode highlighted 4 durations of maximum volatility compression in BTC’s value since 2015.
These included the late-stage 2015 bear market into the 2016 re-accumulation interval, the late-stage 2018 bear market, which got here earlier than a 50% decline in November of the identical yr, March 2020 because the world grappled with the COVID-19 outbreak, and on the finish of 2022 following the collapse of FTX.
Supply: Glassnode
Glassnode assessed BTC’s 7-day value excessive and low and located that these are solely 3.6% aside. This refers back to the highest and lowest costs the king coin has traded at over the previous seven days. It’s typically used to gauge the coin’s value volatility and determine potential assist and resistance ranges.
Supply: Glassnode
At 3.6%, solely 4.8% of its buying and selling days have had a tighter weekly commerce vary for the reason that coin started buying and selling in 2009.
On a 30-day evaluation, Glassnode discovered additional:
“The 30-day value vary is much more excessive, constricting value to only a 9.8% band over the past month, and with solely 2.8% of all months being tighter. Durations of consolidation and value compression at this magnitude are extraordinarily uncommon occasions for Bitcoin.”
Supply: Glassnode
Learn Bitcoin’s [BTC] Worth Prediction 2023-24
State of the derivatives market
Concerning volatility in BTC’s derivatives market, Glassnode discovered that volatility crush stays extreme within the choices market. Volatility crush describes the sharp decline in implied volatility, which is the market’s expectation of future value volatility.
Per Glassnode:
“Bitcoin markets are infamously risky, with choices buying and selling at implied volatility between 60% to over 100% for almost all of 2021-22. Nonetheless, at current, choices are pricing within the smallest volatility premium in historical past, with IV (implied volatility) between 24% and 52%, lower than half of the long-term baseline.
