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Bitcoin and Ethereum, the first two cryptocurrencies, continue to trade below their key resistances of $30,000 and $2,000, respectively, while their 90-day price volatility reached its lowest level in years in August.
Historic Decrease in BTC/ETH Volatility
According to data shared by crypto data analytics firm Kaiko, the 90-day volatilities of BTC and ETH reached 35% and 37% respectively, resulting in less price fluctuations than oil, which has a volatility of 41%. Such a decrease in price momentum for the top two crypto assets was last seen in 2016.
The above graph shows that BTC and ETH have more than halved their price volatility compared to the same period last year. While August is considered a bullish month for the crypto ecosystem, the decreased price fluctuations are being interpreted as a bullish signal by many. In addition to the lowest 90-day volatility in seven years, daily Bitcoin volatility is also at its lowest level in the past five years.
Pay Attention to the Low Volatility Period
A Bitcoin technical analyst known as “CryptoCon” on social media shared their observations on Twitter regarding the decrease in Bitcoin’s price volatility and the period of low volatility.
The analyst noted that Bitcoin’s price went through a similar low price fluctuation cycle before the bull market recovery in 2020 but warned against expecting the same horizontal movement from the top cryptocurrency.
Despite the Black Swan event in 2020, where Bitcoin’s price dropped over 50% in a day and fell below $5,000, the analyst pointed out that Bitcoin recovered the following month. However, when Bitcoin approached $10,000, the momentum faded, and very low volatility was observed again. After three months of low volatility, the BTC price experienced significant declines and created new highs before encountering resistance and entering a sideways movement.
The analyst concluded that Bitcoin establishes its first high level after a period of low volatility, followed by a second high level, and then a third one against key resistance. They observed that every major period of low volatility in BTC is followed by a significant movement.
