Bitcoin
It has long been criticized for its high volatility, with a bull running through sudden, sharp pullbacks that qualify as whole bear bear in stock.
However, the latest bull market, which began in early 2023, was different to feel in a positive way, showing relatively low volatility and drawdowns.
Volatility in downtrend
According to Glassnode’s data monitored, the realized volatility of Bitcoin on a three-month rotation basis has less than 50% during the rotation of this bull, which is significantly less than 80% to 100% observed during the previous bull trend.
The same thing can be said about 30-day indicated volatility, monitored by Volmex’s BVIV index, which is in a downtrend, according to data source tradingview. The indicated volatility refers to the expected price disturbance at a certain period of time and a forward measure.
Stability is likely to stem from the continued growing capitalization of the Bitcoin market, which accidentally promotes stability and has increased institutional participation through ETFs and derivatives.
“Proud of a market capitalization of more than $ 2T, Bitcoin now rank as the -7 largest ownership in the world. As the liquidity deepens, and the appreciation of a possession has reached these heights, the capital required to significantly transfer the price of the owner becomes greater,” said Glassnode, who explained his disgust.
“In addition, the launch of US Spot products ETF, which is supplemented by increasing regulatory clarity, has changed the underlying composition of the investor base, which allows sophisticated, institutional investors and capital to obtain exposure to Bitcoin for the first time,” Glassnode added.
Staircase staircase
Pull the price chart from 2020-21, and you’ll find that Bitcoin’s then-Bull runs from $ 4,000 to $ 70,000 with some steep price pullbacks, sometimes over 30%. In traditional markets, a drawdown of over 20% is generally considered a bear market.
Now compare it to the rally from approximately $ 30,000 to over $ 100,000 from March 2023, and the picture looks different. It has become a staircase of the climb, characterized by an aggressive move that is higher followed by extensive accumulation ranges that set the stage for the next leg higher.
“We noticed a powerful drawdown profile associated with previous bull markets, with current cycle drawdowns generally less than -25% from the local high, with only two chances that exceed -30%,” Glassnode said.
Character change is again linked to institutional participation, lower action and speculation -in excess of the broader market.
The main exchanges, including Binance, offered 100x action during the previous bull running, allowing investors to control a larger trading position. Such use of leverage has helped Investors have juice revenue But also enlarged losses, resulting in cascades of extermination and frequent duplicate price correction.
However, replace Eventually cut The action is large, curbing speculation -so much. That seems to have contributed to the Sturdier Rally at this time.
