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Last Time Bitcoin Volatility Was This Low, BTC Surged by 25% in 24 Hours

For the past few weeks, Bitcoin analysts have observed extremely low volatility in the nascent cryptocurrency market.

Nothing shows this inaction quite as well as the chart below from Blockroots founder Josh Rager. It shows that for the past eight weeks now, BTC has been trapped in a ~15% range — something abnormal for this volatile asset class.

Bitcoin
Chart of BTC’s price action over recent months by Josh Rager (@Josh_rager on Twitter). Chart from Tradingview.com

According to a new analysis, volatility has dropped to crucial lows suggesting that a massive Bitcoin move is imminent.

Bitcoin Volatility Is At Crucial Lows

In March, Bitcoin volatility went off the charts as the cryptocurrency saw one of its worst days in history. Within the span of a day, BTC plunged by 50%, reaching lows of $3,700 in a move that liquidated billions.

Since this volatility surge, Bitcoin has settled. As the chart above depicts, the cryptocurrency has effectively flatlined, trading with no noticeable trend.

This may be set to change, though.

A cryptocurrency trader shared the chart below on July 3rd, showing Bitcoin’s historical volatility index over the past two years.

Per the data, Bitcoin’s volatility is at lows not seen since March/April of 2019.

For those that don’t remember what happened then, here’s a reminder: after trading in the $3,000s for about four months, Bitcoin rocketed 25% higher on April 1st. The move took BTC from $4,000 to $5,000, then kick-started a multi-month bull run that took Bitcoin to $14,000.

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Bitcoin Historical Volatility Index, one-day chart, BitMEX chart from "XC" (@Runtheirstops on Twitter). Chart from TradingView.com

The fact that volatility is dropping so fast suggests Bitcoin will see a move of macro importance in the following weeks, analysts have said.

But when exactly that move comes, though, is a question hard to answer.

There have been some that have suggested the extremely low volatility is a bullish sign. For instance, analyst Eric Thies shared the image below, showing that Bitcoin consolidating for so long may actually be a positive sign:

“BTC stucturally looking less like a local top and more like a launchpad as of now. Naturally speaking, things may need to go down before they really go up but this time looks promisingly different.”

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Bitcoin "top" analysis by Eric Thies (@KingThies on Twitter). Chart from TradingView.com

Low Volatility Might Be a Good Thing

A Bloomberg analyst has speculated that the drop in the frequency of erratic price action is a good thing for BTC. Mike McGlone, senior commodity strategist at Bloomberg Intelligence, wrote in June: 

“Maturation, greater depth and plenty more exposure via futures should continue to suppress the first-born crypto’s volatility, clearly keeping it tilted toward price appreciation. We view the benchmark crypto as a resting bull that likely needs something to change significantly in its 10-or-so-year history to not just resume doing what it was doing: appreciating.”

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