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Bitcoin Volatility Nears Two-Year Low, Breakout Imminent or Becoming More Stable?

The last few weeks’ relative volatility in the cryptocurrency markets has showcased that Bitcoin is less prone to dramatical price swings than other, smaller cryptocurrencies – as noted in Toshi Times’ recent price analysis.

Lending further credence to this notion, Bitcoin is now reportedly nearing an almost two-year low in volatility. More specifically, an important volatility indicator has reached its lowest level since December of 2016.

These specific volatility indicators used are known as ”Bollinger bandsdecreases which are obtained by taking a +2 and -2 standard deviation of an asset’s moving price average.

However, even without using Bollinger bands and measuring Bitcoin’s standard deviation on all cryptocurrency exchanges, the cryptocurrency’s price volatility is still at its lowest point since July of 2017.

This reduced volatility could be interpreted in two main ways. Either, it could be a result of Bitcoin becoming a more stable cryptocurrency overall.

Due to the relatively bearish sentiment shown by the cryptocurrency market, it is not inconceivable that investors have flocked to Bitcoin from other, smaller cryptocurrency coins in order to weather the negative market sentiment somewhat more successfully.

Although Bitcoin has seen substantial losses during 2018, the decrease in Bitcoin price is still somewhat mild compared to some cryptocurrencies which have been worse off.

On the other hand, a long period of low volatility could also indicate that a significant price movement is incoming. The crux with this is that it is hard to determine which direction this price movement would be towards.

Currently, the price of Bitcoin – and the rest of the cryptocurrency market – has increased somewhat during the past week, but it is still too early to say whether the long-term bearish trend has been broken.

At the time of writing, Bitcoin holds a price of $6,492. If these low levels of volatili...

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