With Bitcoin Volatility Down, It is Becoming Boring Say Element Group Analysts
Bitcoin volatility is down and trading it is approaching boring, according to Element Digital Asset Management, a full-service advisory firm for the digital asset capital markets. Bitcoin’s low volatility level suggests the declining interest in the cryptocurrency, while altcoin markets still keep traders on the edge of their seats.
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Bitcoin Volatility Index Lowest Since June
Despite the wild fluctuations in the altcoin market, the price of bitcoin has been reasonably stable as it charted the lowest period of volatility since June 10th. Given the unwavering price action, the 30-day BTC/USD volatility index stands at 2.53 percent, based on the Buy Bitcoin Worldwide Bitcoin Volatility Index. The volatility indicator suggests that bitcoin volatility has steadily declined from the start of the year when it was just a little over eight percent.
Elements Group’s portfolio director Thejas Nalval, and director of quantitative research Kevin Lu, believe that interest in bitcoin trading is dropping. The analysts are not entirely convinced that the relative stability in the bitcoin price is due to the market slowly adopting bitcoin as a store of value.
A report from Element Digital Asset Management stated:
“One can argue that the depressed volatility patterns we’re seeing with bitcoin are the market slowly adopting bitcoin as a SoV. That’s a fun theory but premature. One can also argue that bitcoin price discovery is becoming more efficient due to more natural demand and natural supply. Also possible.”
Is Bitcoin Running Out of Juice?
The Element Group analyst strongly believes that trading bitcoin is becoming boring, while altcoin markets continue their wild price movements. The extended period of relative stability may have lead market participants to disperse into the altcoin market.
Nalval and Lu, co-authors of the Element Group’s weekly report, wrote:
“We think the market has quite simply just run out of juice for now. It’s almost become boring. Seems like everyone is waiting on the sidelines for someone else to make the first move in what could be an extremely long game of chicken.”
Taking the overall metric into consideration, the continued period of low volatility indicates that bitcoin is at a juncture and could jump either way.
However, approval of a Bitcoin ETF by the U.S. Securities and Exchange Commission will certainly push the market upwards. Element analysts believe that the market will continue to react to the Bitcoin ETF approval or disapproval. Nalval and Lu recommend that market participants be aware that any approval of a Bitcoin ETF could take a couple of years.
Is bitcoin price stability good for the entire cryptoverse? Share your views in the comments section below.
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