Bitcoin Volatility Drops To 15 Month Low; What This Could Mean
01 Febrero 2022 - 5:57PM
NEWSBTC
Is this the calm before the storm? Bitcoin volatility is seldom
this steady. After a tumultuous downturn that had the whole market
upside down, bitcoin’s fiat price is relatively flat. Everyone can
breathe and rest, for a while at least. What does this mean and how
long will it last, though? That’s what we’re here to explore.
Related Reading | Dwindling Bitcoin Volatility Could Lead To
Decisive Move It’s no secret that the market was expecting a hike
in the interest rates, and thus people were selling risky assets.
However, the powers that be postponed the increase, and, well, the
market calmed down. During this downturn, though, Bitcoin proved
once again that the market considers it the least risky asset in
the cryptocurrency space. Everyone bled, but Bitcoin considerably
less so. In any case, back to volatility, Arcane Research’s The
Weekly Update has the scoop: “Bitcoin’s 7-day volatility is
now at the lowest level since November 2020. Together with the
trading volume, the volatility exploded last week when bitcoin
dropped below $40,000. After bottoming at $33,500, the bitcoin
price has been slowly grinding upwards, and it looks like the
market has released sufficient pressure for now. Still, we might
see new volatility peaks soon as bitcoin trades closer to several
key resistance and support levels that might be catalysts for
increased volatility.” The pressure is off, but, the steadiness
might not last. If there’s one thing we can count on in regards to
bitcoin is this: volatility will return sooner than later, for
better or worst. BTC/ USD Volatility | Source: Arcane
Research’s The Weekly Update What Are The Resistance And Support
Levels? Bitcoin “has been slowly grinding upwards,” and it’s
getting close to that magical number 40. Again, The Weekly Update:
“$40,000 is a key resistance level. With BTC’s slow grind upwards
lately, we could see BTC testing this resistance level shortly. A
breakthrough would be a relief for the bulls and could signal a
trend reversal.” On the other hand, if things go south and the
market starts bleeding again, there’s another number that we have
to be aware of: “Towards the downside, $32,500 acted as support
during the initial sell-off, but $29,000 remains as the most
critical support level. A breakout below $29,000 would be
unsettling, which could cause havoc in the market.” If Bitcoin
touches 40 or 29, the boat might start to rock. Fasten your
seatbelts and be sure to wear a life jacket. BTC price chart for
02/01/2022 on Bitstamp | Source: BTC/USD on TradingView.com What
Causes Bitcoin Volatility? The short answer is supply and demand.
However, since the Bitcoin economy is still small compared to the
world’s, several factors can upset or propel the price. From any
kind of news to influencers’ opinions to regulation talk or
concrete action to whales dumping on the market to interest rates
hike rumors. Anything. Also, take this Investopedia insight into
account: “Bitcoin has only been around for a short time—it is still
in the price discovery phase. This means that prices will continue
to change as investors, users, and governments work through the
initial growing pains and concerns until prices stabilize—if a
stable point can be reached.” Related Reading | This Bitcoin
Volatility Index Pattern Suggests A Short Squeeze May Be Near Yes,
Bitcoin is the largest cryptocurrency by far and Fidelity thinks it
“should be considered first and separate from all other digital
assets that have come after it.” However, the asset is still a wild
teenager. Expect volatility and learn how to deal with it. It’s
going to be a bumpy ride. Featured Image by Pexels on Pixabay |
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