Impact of Bitcoin’s Stable Volatility on BTC Prices
Recent analysis by the pseudonymous CryptoQuant expert, AxelAdlerJr, has unveiled a scenario of low volatility in the Bitcoin (BTC) market. According to the findings of AxelAdlerJr’s latest research, two pivotal volatility indicators for BTC have exhibited a downward trend in recent weeks, signaling a decrease in the likelihood of immediate price fluctuations.
An in-depth examination conducted by AxelAdlerJr first focused on BTC’s Garman-Klass Realized Volatility, a metric that tracks the historical volatility of BTC’s price. This metric blends the asset’s highs, lows, openings, and closings over a specific timeframe to gauge its volatility during that period.
AxelAdlerJr highlighted that BTC’s Garman-Klass Realized Volatility has now descended to 20%, indicating a reduction in the asset’s price volatility when the metric generates lower values.
Historical data study emphasized a correlation between the metric hitting this low mark and significant price shifts observed in BTC over the past six years.
Furthermore, the analysis delved into BTC’s Volatility Index utilizing a 30-day simple moving average (SMA) as a benchmark for measuring price gyrations within the cryptocurrency market.
Similar to the Garman-Klass Realized Volatility, BTC’s Volatility Index has depicted a decline, reinforcing the prevailing low volatility ambiance within the primary digital asset’s trading sphere.
Per the insights from CryptoQuant’s expert, the index has descended to exceptionally low levels, a scenario witnessed only four times in the past six years.
Bitcoin’s Price Fluctuations are Limited
CryptoCrypto’s evaluation of Bollinger Bands and Average True Range (ATR) for Bitcoin validates the analyst’s stance.
Observations extracted from BTC’s Bollinger Bands revealed a contraction in the divergence between the upper and lower bands, a hallmark of reduced price swings.
Concurrently, the diminishing Average True Range (ATR) for Bitcoin corroborated this trend. ATR gauges market volatility by computing the average price range between highs and lows over stipulated periods.
As the ATR indicator descends, it signifies diminished market volatility, hinting that the asset’s price is consolidating within a range. At the latest reading of 2138.35, BTC’s ATR has declined by 44% since April 19.
AxelAdlerJr views the ongoing low volatility in the BTC market as a positive development, stating that,
“Given the current bullish market structure and the potential for a substantial price movement following the low volatility phase, it can be inferred that the market is on the verge of establishing a new bullish trend,” the analyst concluded.