Bitcoin volatility drops to a multiyear low – why?

Bitcoin volatility drops to a multiyear low – why?

August 9, 2023

By Abiodun Oladokun

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BTC’s annualized volatility fell to levels last seen in December 2016.

However, Glassnode reported that this was not a new phenomenon.

Infamous for the significant volatility in its price, the past few months have been marked by volatility compression for the leading coin Bitcoin [BTC], Glassnode found in a new report. With most BTC trading sessions marked by “quietness,” “fewer than 5% of trading days have a tighter trade range,” the on-chain analytics firm noted.

Mum says the market

According to Glassnode, BTC’s annualized volatility has steadily declined this year. Observed within the 1-month to 1-year window period, this has fallen to levels last seen since December 2016.

Noting that this is not a new phenomenon, Glassnode highlighted four periods of extreme volatility compression in BTC’s price since 2015.

These included the late-stage 2015 bear market into the 2016 re-accumulation period, the late-stage 2018 bear market, which came before a 50% decline in November of the same year, March 2020 as the world grappled with the COVID-19 outbreak, and at the end of 2022 following the collapse of FTX.