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Historical data from the Bitcoin Volatility Index indicates that the price of the crypto could see a big move in the near future.
Bitcoin Volatility Index has recently fallen below 25 . been
As noted by an economist on TwitterThe volatility index has fallen to a zone that has historically been followed by an explosive movement in BTC.
the “volatility index” in question is the BitMEX .BVOL index, and according to the exchange, the value of the metric is “the 30-day rolling volatility on an annual basis from the daily 11:30 UTC to 12:00 UTC Time Weighted Average Price (TWAP) of Bitcoin/USD.”
Here, the time weighted average price is calculated using measurements taken at 1 minute intervals over a half hour period.
What this index tells us is how much the recent BTC price has deviated from the average, or more simply, how volatile it has been recently.
High values of the statistic suggest that the crypto has shown some sharp moves lately, while low values imply an aging market.
Below is a chart showing how the value of the Bitcoin Volatility Index has changed over the past few years:
The value of the metric seems to have been quite low in recent days | Source: Alex Krüger on Twitter
As you can see in the chart, the analyst has highlighted relevant trend points between the Bitcoin volatility index and the price of the crypto.
It seems that when the indicator dived below a value of 25 and then dropped below the level, the BTC price has seen some significant moves that caused the value of the metric to skyrocket.
There have been three instances of this trend in recent years, two of which have seen the price make a bullish move while the third was a crash.
The chart shows that the Bitcoin volatility index has fallen again in this historical zone as the current BVOL value is around 24.59.
If the same trend as during the previous instances now follows, then the crypto may be heading in a different direction big move in the near future.
At the moment of writing, The price of Bitcoin hovers around $19.4k, up 1% over the past seven days. Over the past month, the crypto has fallen 9% in value.
The chart below shows the trend in the price of the coin over the past five days.
Looks like the value of the crypto has mostly been moving sideways during the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com