Bitcoin (BTC) and ether (ETH) 90-day price volatility hit multi-year lows in August, with the two cryptocurrencies continuing to trade below key resistance levels of $30,000 and $2,000, respectively.
According to data shared by crypto analytics firm Kaiko, the 90-day volatility of BTC and ETH hit 35% and 37%, respectively, making it less volatile than oil, which has a volatility of 41%. The last time the price momentum of the top two crypto assets saw this decline was in 2016.
The above chart shows that the price volatility of BTC and ETH has increased by more than half compared to the same period last year. While August is considered a bullish month for the cryptocurrency ecosystem, the drop in price volatility is considered bullish by many.
In addition to the 90-day volatility being at its lowest level in seven years, Bitcoin’s daily volatility is also at its lowest level in five years.
A bitcoin technical analyst with the social media name “CryptoCon” shared on the X platform his observations on the decline in bitcoin price volatility and what actually happens after periods of low volatility.
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The technical analyst noted that Bitcoin’s price experienced a similar cycle of low price volatility in 2020 ahead of a bull rally; however, they warned of sideways moves for the top cryptocurrency.
#bitcoin Volatility continues to drop, and I’ve proven that’s bullish
But the most pressing question is, when will the lateral run-in end?
Thinking of this reminds me of times very similar to now… pic.twitter.com/psO50vxUWD
— CryptoCon (@CryptoCon_) August 16, 2023
The analyst pointed out that despite the black swan event in 2020, when the price of Bitcoin fell by more than 50% in one day, falling below $5,000, Bitcoin recovered within the next month. However, as the price of Bitcoin approached the $10,000 mark, the momentum evaporated, again recording very low volatility. After three months of low volatility, bitcoin prices broke out and hit new highs before hitting resistance again and trading sideways.
Analysts concluded that Bitcoin’s price bounced off its lows after a period of low volatility, forming a first high, followed by another second high, and a third high at the critical formed at the resistance level. CryptoCon concluded that every major period of low volatility in Bitcoin is followed by large volatility.
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