Bitcoin price breaks out above 51,000 US dollars: Volatility lower than in 2017
Bitcoin volatility is lower than in 2017, but analysts say it would need to fall further to maintain the upward momentum.
Bitcoin (BTC) has reached a new all-time high above US$51,300. The bullish rise that began in October 2020 thus continues.
According to Bloomberg, the current run is different in terms of volatility from the bull rally in 2017, which peaked below US$20,000.
Data from Woobull Charts says Bitcoin’s 60-day volatility is at 14.25 percent. This is a significant drop from the 32 percent recorded at the peak of the bull run in 2017.
In terms of realised volatility, however, Bitcoin’s price fluctuations are still far higher than gold. Data from crypto analytics provider Skew says Bitcoin’s current Bitcoin Storm three-month realised volatility is 90 per cent. That’s more than five times the actual price movement for gold, according to analysts at JPMorgan Chase.
In a note to investors, JPMorgan Chase analysts argue that Bitcoin’s current rally is unsustainable until volatility declines significantly. This assessment probably stems in part from the rollercoaster ride that occurred in January. In the process, BTC rose 46 per cent to almost US$42,000. It then fell by over 30 per cent to below US$30,000.
For Bloomberg strategist Mike McGlone, the current bitcoin price movements are only temporary
The market is expected to calm down again. According to McGlone, the growing institutional acceptance of BTC will even reduce Bitcoin’s volatility to the point where it is below that of gold.
Tesla recently announced it had bought US$1.5 billion worth of Bitcoin. The business intelligence firm MicroStrategy also continues to buy Bitcoins.
In early February, the US crypto exchange Kraken issued a report predicting that Bitcoin’s continued upward trend would be accompanied by reduced volatility.
According to Peter Brandt, Bitcoin is once again in a parabolic rise. The largest cryptocurrency by market capitalisation has risen by around 75 so far this year.