Bitcoin Volatility Hits Record Low, Calm Before a Major Short-Term Rally? Experts Weigh In

Bitcoin volatility hits all-time low, which could lead Bitcoin to initiate a major rally and bottom out at $6,000

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

In the beginning of October, Bitcoin achieved a 17-month low volatility rate, recording its highest level of stability since mid-2017.

Bitcoin Price and Market Cap in 2018

Bitcoin has started to experience a noticeable decline in its volatility during a period in which the volume of the dominant cryptocurrency achieved a new yearly low. Thus, the volume of Bitcoin dropped from $4.2 billion to $3.2 billion on October 7, by more than 23 percent. Since then, the volume of BTC has recovered substantially, back to $4.2 billion, but it still remains substantially lower than previous weeks. The overall decline in trading activity in the cryptocurrency exchange market due to the uncertainty in the short-term price trend of Bitcoin is said to have contributed to the significant drop in its rate of volatility.

Mike McGlone, a commodity strategist, stated that as the cryptocurrency market matures, the rate of Bitcoin volatility will continue to rapidly decline. He explained that an emerging asset class often sees a large discrepancy in its daily price movements and volatility in volume until it finds strong infrastructure to support and solidify its market.

“This is a maturing market, so volatility should continue to decline. When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging, and arbitraging.”

Since August 9, the price of Bitcoin has remained relatively stable in the range between $6,400 and $6,800. Apart from one occasion in mid-September during which BTC surpassed the $7,000 mark, the asset has shown no signs of solid momentum, mostly due to the lack of volume in the cryptocurrency exchange market.

On October 6, the cryptocurrency exchange market recorded its lowest daily volume in over 12 months, leading traders to be concerned regarding the short-term trend of the market.

Historical lows in volatility: their impact on the crypto market

The decline in the volume and volatility of Bitcoin can have a negative impact on the short-term price trend of the asset. But historically, BTC tended to experience a dip in volume and volatility before initiating large rallies on the upside.

As seen in the volatility chart of Bitcoin, dating back to 2012, provided by Woobull, a cryptocurrency market data platform operated by technical analyst Willy Woo, Bitcoin achieved one of its lowest volatility rates in October 2013.

Bitcoin 60-day volatility

Image source: Woobull.com

Subsequent to demonstrating a few months of stability, by the end of 2013, the price of BTC increased from around $30 to $1,000, by more than 30-fold within a two-month period. The stability of BTC allowed investors in the market to initiate an accumulation phase in a low price range, enabling more investors to enter the market and acquire BTC.

As prominent venture capital investor Garry Tan, who invested in Coinbase and a group of startups, worth more than $20 billion collectively, said, a low price range helps investors enter a new market or an asset class with significantly less risk:

“The crypto winter generally makes it safer for super-long-term oriented Yale-model institutions to enter at a price that isn’t dangerous. You know what is scary? Investing and then immediately seeing an 80% drop. That is hard to recover from.”

Bitcoin is unlikely to experience a surge in its price in the magnitude of its previous rallies including the 30-fold growth it achieved in 2013. But, in the long-term, stability could allow BTC to establish legs and build stronger support levels in its low price range, increasing the probability of both short-term and mid-term rallies.

Bitcoin price and MArket Cap in 2013

Why the Bitcoin market is not reacting to positive developments

Currently, the cryptocurrency market is not reacting to many of the positive developments that have emerged in the sector over the past few months.

In a period of three months, NYSE, Microsoft, and Starbucks have announced the launch of regulated cryptocurrency brokerage Bakkt, to better institutionalize the cryptocurrency market. Coinbase and BitGo received the approval of regulators to operate as trusted custodians to service institutional investors. Citigroup and Goldman Sachs have announced their plans of establishing crypto-focused custodian solutions in the short-term.

$30 billion brokerage giant TD Ameritrade recently backed the launch of ErisX, the first regulated multi-crypto futures market with Bitcoin, Ethereum, Bitcoin Cash, and Litecoin support. Seba, a cryptocurrency bank in Switzerland, is expected to obtain a banking license from the Swiss Financial Market Supervisory Authority (FINMA) by the end of October.

It is entirely possible, upon the recovery of Bitcoin’s volume and trading activity in the cryptocurrency exchange market, that the market will begin to respond to most of the progress that has been made in the sector over the last three months.

Stability of Bitcoin and what it means for the market

Bitcoin has not demonstrated such a high level of stability in a long period of time. Considering that BTC has continuously demonstrated higher lows throughout the past 30 days, meaning that BTC has consistently recovered beyond its previous high point, it is more likely for BTC to eye a movement to the upside.

Bitcoin Price Over the Last Month

Danny Les, cryptocurrency analyst, stated that extended periods of stability and consolidation often lead to a strong upside movement.

“Any extended period of consolidation or ranging is usually the run up to a fairly strong move. That said, opinion is mixed on whether that move is up or down. When you’re analyzing charts, generally higher highs and higher lows are the indicators of a positive move up. Lower highs are probably not the best thing to pin hopes to in expectation of a rally. However, this is Bitcoin so [it is unpredictable].”

Many analysts and traders in the cryptocurrency sector have echoed this sentiment, stating that in hindsight, the bull run of BTC will be strikingly obvious. But, the low volume of the dominant cryptocurrency and the lack of momentum on major cryptocurrencies, still poses a concern for traders in the space. Les added:

“Unless already comfortably in profit, a drop in volume is never something one wants to see when in a position. The overall sentiment attached to crypto probably isn’t the most positive. Bitcoin effectively nose diving since last years all-time high has created a steady wave of retail interest decline across all crypto markets.”

Unprecedented stability since August: $6,800 is a major resistance level

Billionaire investor Mike Novogratz has emphasized $6,800 as a major resistance level for Bitcoin throughout the past month, and if BTC comfortably surpasses that level, then it will be able to eye resistance levels in the $7,000 and $8,000 region.

If Bitcoin breaks out of the $6,800 mark relatively quickly, Novogratz said it is possible for BTC to demonstrate a 30 percent increase in price by the end of the year.

“Thirty percent – there’s some key levels. You’ve got to take out $6,800 and if that breaks, you’ll go up to $8,800, $9,000 and if that breaks, it’s $10,000. Those kind of numbers make sense to me by the end of the year. You’re not going to see the massive run until the institutions actually start buying a lot. And the architecture is being put in place now. It’s going to be announced in the next few months. But then it’ll take a little bit of time to go through investment committees and whatnot.”

The issue is that since August 9, Bitcoin has consistently tried to break out of the $6,800 resistance level and failed in most of its attempts. It recovered beyond $7,000 on September 4, but it struggled to sustain its momentum and fell back down to the mid-$6,000 region.

Les explained that it is more likely for Bitcoin to experience a shakeout prior to a major rally on the upside. BTC has to experience a promising increase in its volume and price to ensure that 2019 begins with a positive sentiment:

“I suspect that there will be more blood before any kind of serious rally up. Volume and price, certainly in Bitcoin’s case need to pick up before we get to near Christmas, otherwise we will see the year out with a very negative sentiment attached.”

Is it the right time to start accumulating Bitcoin?

In late August, when the price of BTC was still at around $6,600, ShapeShift CEO Erik Voorhees stated that the bear market is not over yet but it is a viable period for new investors in the space to start accumulating Bitcoin.

Voorhees stated the rate of collapse of the crypto market has slowed down considerably and it is highly unlikely for BTC to decline far below its current price range.

BTC has dipped below the $6,000 mark on three occasions throughout the past nine months. BTC recovered relatively quickly from the $5,900 region, leaving a short window for investors to acquire the dominant cryptocurrency at a price below the $6,000 level.

BTC/USDT

Image source: Cryptowat.ch

Given the strong support level of Bitcoin at $6,000 and many of the positive developments the sector has seen, Voorhees stated that it is an appropriate time to start accumulating BTC.

According to Les many platforms and companies in the cryptocurrency sector are continuously working on building the infrastructure that is necessary to support the next wave of users, investors, and consumers:

“Many platforms are ignoring talk of token prices and are just quietly working in the background to fulfil their roadmap objectives. In 2019, I think will be a very interesting year for us all. Mainstream adoption of the technology will start to become apparent and investment methods into the market will become much more in line with traditional markets. The future is very bright, however there has to be a bit of darkness beforehand.”

TD Ameritrade, the fifth largest brokerage in the US, stated that it sees sufficient demand from investors in both the crypto and financial sector to be comfortable with its investment in the cryptocurrency sector.

Why bulls are more likely to win over bears in 2018

Technical indicators, such as Williams’ Percent Range of Bitcoin, show that it is more bear-biased as of October 2018. However, as Don Alt, a cryptocurrency trader supposed, bulls have leverage over the bears which are currently dealing with a market with low volume and activity.

The market has also demonstrated intense seller fatigue throughout September and October, making it unlikely for a large downside movement to occur in the weeks to come. It is possible for BTC to be stagnant in a low price range but the probability of the dominant cryptocurrency dipping below the $6,000 support level is low.

Thus, a final shakeout could be in play prior to a major mid-term rally. Generally, most analysts agree that the low rate of volatility Bitcoin has shown throughout the past three months, and particularly in October, will help fuel the next mid-term rally of BTC.

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Bitcoin’s Low Volatility Might Mean Price Manipulation Is Waning

Bitcoin’s Low Volatility Might Mean Price Manipulation Is Waning

Since its inception, Bitcoin has exhibited a highly volatile nature. However, during the past few days, Bitcoin’s price volatility has fallen to the lowest level of 2018. The U.S. Securities and Exchange Commission (SEC) will most likely view Bitcoin’s calmer price oscillations favorably. Low Volatility Signals That Investors Are Now Holding to Bitcoin Bitcoin’s (BTC) volatility has been decreasing recently. According to data provided by Highcharts, the Bitcoin volatility index for the latest 30-day estimate

The post Bitcoin’s Low Volatility Might Mean Price Manipulation Is Waning appeared first on Bitcoinist.com.

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Bitcoin Hovers Near 6,600, While Most Top Coins See Little Price Volatility

Crypto markets are seeing little price movement today, with only Ripple seeing a more substantial loss of close to 3% among top coins.

Friday, Oct. 5: cryptocurrencies are seeing little volatility over the past 24 hours to press time, with the majority of losses and gains of top coins capped within a 1 percent range on the day, as data from Coin360 shows.

Market visualization by Coin360

Market visualization by Coin360

Ripple (XRP) is the only outlier in the top ten coins, down a little over 3 percent on the day to trade at $0.52. The asset – which in September briefly outflanked Ethereum to seal the second spot ranking on CoinMarketCap listings – has had a shaky start to the month, and is currently trading almost 15 percent lower than its intra-week high at around $0.61 September 30.

On its rolling weekly chart, however, Ripple is a more modest 4.6 percent in the red. On the month, Ripple is up an impressive 57 percent.

Ripple 7-day price chart

Ripple 7-day price chart. Source: Cointelegraph Ripple Price Index

Bitcoin (BTC) is seeing negligible price change on the day, trading around $6,580 as of press time. Since trading above $6,600 at the start of its weekly chart, the top coin has seen two subsequent price corrections (Sept. 29 and Oct. 3).

Having briefly dipped below the $6,500 threshold during the latter of these, Bitcoin has reclaimed some ground and is back pushing a slightly higher price point.

On its weekly chart, Bitcoin is just over one percent in the red. Monthly losses are also mild at 2.5 percent.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

Taking note of Bitcoin’s relative price stability recently, twitter personality and crypto trader WhalePanda tweeted today: “With everyone launching their own stablecoin Bitcoin decided to be the ultimate stablecoin.”

Ethereum (ETH) is down a marginal 0.15 percent on the day to trade at $222 at press time. After a steep plummet Sept. 29 to trade as low as $215, the leading altcoin briefly recovered to push above $235 Sept. 30. Throughout early October, Ethereum has seen renewed losses, although its lowest Oct. price point has been at around $218.

Ethereum’s market cap is around $22.8 billion, slightly widening its margin ahead of Ripple (XRP), which today has a market cap of $20.5 billion.

On the week, Ethereum is almost breaking even, up 0.6 percent; on the month, the altcoin is down around 2.8 percent.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: Cointelegraph Ethereum Price Index

The remaining top ten coins listed on CoinMarketCap are seeing red, almost all capped within a 1 percent range.

Bitcoin Cash (BCH) is down 1.14 percent at $511.51, whereas EOS (EOS) is down only 0.33 percent at $5.73. Just as fractionally, Dash (DASH) is up only 0.10 percent on the day to trade at 180.94.

In the context of the top twenty coins, 24-hour price fluctuations are similarly slight, though more mixed red and green. Crypto exchange Binance’s native token Binance Coin (BNB) is the only exception, up a strong 3.14 percent to trade at $10.61 at press time.

At the start of October, Binance Labs revealed it had made a multi-million dollar investment in decentralized digital content ecosystem Contentos.

After strong growth and volatile price action earlier this week, NEM (XEM) is up just a fraction of a percent on the day: the asset is trading at $0.105 as of press time.

NEM’s 7-day price chart

NEM’s 7-day price chart. Source: CoinMarketCap

Ethereum Classic (ETC) is down an above-average 1.19 percent, trading at $10.97 per coin at press time.

Total market capitalization of all cryptocurrencies is around $218.2 billion as of press time, after seeing an intra-week low Oct. 3 at around $214 billion.

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Earlier today, reports emerged that the  U.S. Ivy League university Yale is said to have been one of the investors that helped to raise $400 million for a major new cryptocurrency-focused fund. The fund, dubbed ‘Paradigm,’ was reportedly created by Coinbase co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang, and Charles Noyes, formerly of stalwart crypto fund Pantera Capital.

In other industry news, the U.S. Securities and Exchange Commission (SEC) has outlined a time frame for reviewing proposed rule changes related to a series of applications to list and trade various Bitcoin (BTC) exchange-traded funds (ETFs). The review period affects nine separate ETFs that have been proposed by three different applicants, and the SEC has set a deadline of Oct. 26 for parties to file statements in support or rejection of the proposals.

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FT Highlights Crypto as One of Last 10 Years’ ‘Biggest Changes’ in Financial Markets

The Financial Times has released a special report on financial markets over the past 10 years, outlining crypto as one of the “biggest changes” globally.

The Financial Times (FT) has released a Special Report on global financial markets Monday, October 1. In the report, FT dedicated two out of six sections to the cryptocurrency industry.

In their report entitled “Exchanges, Trading and Clearing,” FT names cryptocurrency alongside such phenomena as Brexit and the emergence of new markets as “some of the biggest changes” in financial markets over the past ten years.

One of the two crypto-focused articles in the report, entitled “Crypto exchanges must face up to responsibilities as they mature,” provides an overview of crypto markets in comparison with traditional markets, pointing out major issues in the industry, such as regulation.

The article covers major disputes between traditional markets experts and the disruptors in the crypto space. While chief executive of the U.K. division of Coinbase Zeeshan Feroz stated that crypto markets’ structure will “eventually mirror that of traditional markets,” Peter Randall, the opponent from the fiat trading industry, considered it “unlikely” to happen.

Randall argued that the existing ecosystem of crypto markets is unlikely to provide the “operational resilience” that is required by “complex markets and financial systems,” citing the lack of liquidity on crypto markets.

In the second crypto-related article of FT’s report, the outlet details how Chicago’s proprietary trading industry is “deepening its exposure to the wild crypto market,” with proprietary trading firms claiming that they are taking a “hard look” on crypto.

Emphasizing the fact that proprietary traders are usually “the highest-volume participants” on the markets, FT authors stated that crypto prices’ volatility is actually a “good thing” for those trading groups. Rob Sagurton, director of digital asset direct trading at proprietary trading firm Jump Trading, has revealed that the company is operating crypto trading of around 10-15 “most liquid main cryptocurrencies,” as well as working with futures markets.

In a speech addressed to the general debate of the 73rd Session of the General Assembly of the U.N. last week, the Prime Minister of Malta, Joseph Muscat, said that cryptocurrencies are the “inevitable future of money,” and that blockchain can galvanize a more transparent and equitable society.

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Bitcoin Price Declines To Nearly $8k Amidst Bing Crypto Ad Ban

Crypto markets see a sharp decline over 24 hours, almost all of top 100 altcoins on Coinmarketcap are in the red.

May 16: Crypto markets have seen a sharp decline over the past 24 hours with almost all of top 100 coins listed on Coinmarketcap (CMC) in the red.

COIN360

Market visualization from Coin360

After losing the $9,000 support on May 11, Bitcoin (BTC) continued its fall, now approaching the $8,000 level. Having lost almost 3 percent of its value in 24 hours to press time, the original cryptocurrency is currently trading at $8,288. Despite this most recent fall, Bitcoin has seen over 3 percent gains over the last 30 days, according to Cointelegraph Price Index.

Bitcoin price chart

Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index

Ethereum (ETH) has dipped below $700, now hovering around the mark with a 2.31 percent loss over 24 hours to press time.

Ethereum price chart

Ethereum price chart. Source: Cointelegraph Ethereum Price Index

Total market cap has lost nearly $100 bln over the last 10 days, dropping to as low as $381 bln at press time.

Total market capitalization chart

Total market capitalization chart. Source: CoinMarketCap

EOS and Stellar (XLM) have seen some of the biggest declines over 24 hours at over 5 and six percent, respectively. The coins are currently trading at $12.31 and $0.329 respectively.

Bitcoin Cash (BCH) is down almost 7 percent over a one-day period, trading at $1,269 at press time. Yesterday, May 15, BCH implemented a hard fork that increased its block size from 8MB to 32MB and reactivated Bitcoin script operation codes (Op codes) – an upgrade, which has so far apparently failed to produce a positive effect on the price.

The decline in crypto markets coincided with the recent decision by Microsoft-owned search engine Bing to join the ranks of other internet giants in banning crypto-related ads from its network by July 2018.

Cryptocurrencies also came under criticism by European financial authorities. Monday, May 14, European Central Bank (ECB) board member Yves Mersch claimed that banks should “segregate” their dealings in cryptocurrencies from other activities, citing high volatility of crypto markets and stressing that digital tokens “do not qualify as money.”

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