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Data shows that Bitcoin’s daily volatility has continued to decline this week, reaching very low levels not seen in about two years.
Bitcoin 30-day volatility has fallen to just 1.9% in recent days
According to the latest weekly report from mysterious investigation7-day volatility hit a low below 1% earlier in the week.
the “daily volatility” is an indicator that measures how Bitcoin’s daily returns have deviated from the average over a period of time.
While this period can be any length, two versions of the metric are particularly natural, the 7-day volatility and the 30-day volatility.
Here is a chart showing the trend in these daily Bitcoin volatilities, as well as the daily returns in the price of the crypto, 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 in the chart above, Bitcoin volatility has been on the decline for the past few weeks as the price of the coin has been stuck in consolidation.
The 7-day version of the indicator recently broke below the 1% level before hitting a low there and bouncing back to the current 1.1% level.
This bottom was the lowest level the stat has seen since July 2020, around the time of the rebound after the COVID crash.
Bitcoin 30-day volatility is also at an all-time low as the indicator’s value is just 1.9% right now.
The report notes that while these volatility values recently suggest a completely old price, it is also true that the crypto has seen some intraday activity, which the indicator does not take into account as it only takes daily closing prices.
Bitcoin price fluctuated nearly 9% in 12 hours on Thursday as the US CPI release went live. But this price change had almost completely disappeared by the time the daily close happened.
Historically, periods of very low volatility, such as now, have been followed by periods of violent price movements. It now remains to be seen whether BTC also observes a similar trend this time around or not.
At the moment of writing, The price of Bitcoin floats around $19.1k, up 4% over the past week. Over the past month, the crypto has fallen 2% in value.
The chart below shows the trend in BTC price over the past five 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