Bitcoin has entered an unprecedented period of low volatility. This is reflected in the 200-week moving average measure, which shows that BTC has entered a deep blue zone, occasionally reaching purple. The heat map reveals this as the coldest period in its history and the longest since 2012.
The Background and an Uncertain Future
The period of stability that Bitcoin is currently experiencing has persisted since June 2022, reaching purple in November of that year. BTC has previously undergone similar phenomena. In contrast, during 2019, it barely reached the level of deep blue. In 2015, low volatility persisted throughout the year but did not reach the current level.
There was only one occasion when purple was much more intense, from March to June 2012. However, this phenomenon lasted much shorter in comparison to the prolonged calmness being observed today.
Conversely, in 2017 and 2013, greater volatility was experienced, reaching red peaks. This suggests that volatility in Bitcoin has decreased both in bullish and bearish movements.
Various speculations have arisen regarding the reasons behind this low volatility. On one hand, some argue that it is a sign of maturity and an increase in BTC’s market capitalization. Others choose to blame FTX, which sold its customers’ bitcoins to “invest” in risky bets, which could have influenced price stability.
Despite this scenario of low volatility, it is unclear whether this means that Bitcoin will enter a sustained period of lower volatility in the future. What is evident is that Bitcoin is stagnant at a price level of around $30,000 for an extended period, similar to how it remained at around $6,000 in previous cycles and $300 in its early years.
Expectations revolve around an anticipated repetition of history, where the pattern of price increases following these consolidation periods continues. Investors and cryptocurrency market enthusiasts are eagerly awaiting to see if a Bitcoin rally will finally allow it to surpass the six-digit barrier. This growth could mark a significant milestone in Bitcoin’s history and provide a new boost to its widespread adoption.
