Market Performance and Volatility Analytics

Since Bitcoin and cryptocurrencies in general are still in the price discovery phase, price volatility could likely remain relatively high. However, as Bitcoin reaches greater adoption, it is possible that Bitcoin volatility could subside. At the very least, it is likely that more mainstream adoption of the premier cryptocurrency will lower its volatility. With that said, it is not guaranteed that a reduction in Bitcoin price volatility will immediately spill over into lower overall cryptocurrency volatility.

Notice that the lower target aligns with a prior trend breakout area and the 78.6% Fibonacci retracement at 2,211. With the day’s low of 2,301, at the time of this writing, gold is testing support of another top trend channel line that can be combined with the 50% retracement at 2,298. That is a possible support zone and so far, it is stopping the descent.

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Open interest (OI) is the total value of outstanding derivative crypto contracts that have not been settled yet. Which cryptocurrency has been the most volatile over the last 30 days? This chart lets you compare the 1D volatility of each cryptocurrency over a period of time. However, the drop today took the price of gold below the 50-Day MA, and it is on track to end Friday below it, thereby confirming a breakdown. The most recent swing low at 2,277 is a key price level as those low forms the price structure of the uptrend. If it is broken the characteristics of the trend begin to alter and the chance for a deeper or prolonged correction increases.

Someone placing their assets in a relatively volatile asset class, like cryptocurrencies, is open themselves up to risk. More accurately, they run the risk of having the marketing erode the value of their holdings with price swings. However, it is worth remarking that although this can be seen as a drawback in the eyes of some, others view it as a benefit.

Volatility Screener

According to TradingView’s Bitcoin dominance chart, Bitcoin’s market capitalization dominance is less than 45%. True, this is still significant, but Bitcoin’s long-term market cap dominance trend seems to be negative. The standard deviation of daily returns for the preceding 30- and 60-day windows.

One of their products in this regard is unique volatility indices that show the market forecast for a coin’s future price movements. Some of those skeptical of Bitcoin, or cryptocurrencies in general, point to the asset class’ volatility as detrimental. Keeping this in mind, let us look at why volatility of crypto makes it unsustainable in the eyes of the crypto naysayers. In addition to what we’ve previously gone through regarding how uncertainty is tied to volatility, there is also more.

Frequently Asked Questions

On the other hand, crypto volatility can be seen as the overall volatility of the crypto market. It is easy to see how differentiating between the two will potentially become more important in the future. As Bitcoin’s industry dominance appears to be waning, this distinction potentially becomes even more significant. On the other hand, the emergence of the derivative market has signaled the need for solid pricing strategies as well as reliable risk measures.

• For example, if the US dollar was to be dramatically devalued from surging inflation, then this would essentially erode the value of USDC in comparison to other cryptocurrencies.
• Such cryptocurrencies are inherently more volatile than Bitcoin, which is beginning to see increasingly widespread adoption.
• Notice that the lower target aligns with a prior trend breakout area and the 78.6% Fibonacci retracement at 2,211.
• That is a possible support zone and so far, it is stopping the descent.

Decentralized finance, or DeFi, one of the largest industries in the cryptocurrency space, surged to more than $150 billion in May 2021. Volatility trading is set to be the next big development for DeFi, ultimately giving traders one more way to profit from the cryptocurrency market’s volatile nature. It is worth taking into account that the data behind this article is a few years old. What’s more, it is primarily based on data from four different exchanges; Kraken, Coinbase, Binance, and Gemini. Moreover, the report in question looks at Bitcoin volatility rather than overall crypto volatility. It is possible that there is a growing disconnect between crypto and Bitcoin volatility.

Cryptocurrency Volatility Meter

Nevertheless, it is important to make a significant distinction when talking about volatility among cryptocurrencies. Specifically, this distinction is to separate crypto volatility and Bitcoin volatility. While those unfamiliar with the cryptocurrency industry might view crypto volatility and Bitcoin volatility as largely synonymous, this is not the case. Granted, Bitcoin is still for many ”the face” of the cryptocurrency industry.

However, stablecoins aren’t protected from the price volatility of their underlying assets. For example, if the US dollar was to be dramatically devalued from surging inflation, then this would essentially erode the value of USDC in comparison to other cryptocurrencies. This can also be understood as that USDC’s ”price volatility” would spike.

Bitcoin (BTC) News Today: ETF Flows Defy Market Trends Amid Fed Speculation

To properly understand the issue of crypto volatility – or Bitcoin volatility – we first need to grasp volatility. Volatility, as a general concept, refers to something’s instability or likeness to suddenly change. In a stock market or cryptocurrency context, however, volatility refers to price volatility. Put in the simplest possible terms, price volatility can be understood as the fluctuations in the price of a commodity. Price volatility is generally measured in percentages and does not relate to a commodity’s absolute price. Rather, it measures the percentage change in the price of a certain asset.

We also provide educational resources to help new users understand how to make the most of the screening tool. Keeping this in mind, it makes sense that ”crypto volatility” refers to the price stability of cryptocurrencies. In traditional markets, volatility is often driven by supply and demand. Although this question is a multifaceted one, it can easily be answered by ”speculation”.

However, it’s important to remember that trading involves risks and the market can be volatile. The index is model-free and designed to use the full range of option strikes to best capture What Is A Cryptocurrency Wallet the market outlook on expected volatility. This transparent, reliable and time-tested approach enables the index to present precise and meaningful information to market participants.

The VIX Index is oftentimes said to describe the stock market’s current uncertainty, risk, and ”fear”. This can be an important factor when making long-term investment decisions. Consequently, there are also indexes trying to track not only specific Bitcoin volatility, but also overall crypto volatility. For example, the Crypto Volatility Index, or CVI, is another tool that measures total crypto volatility. Moreover, the CVI is based on the classic Black-Scholes option pricing model.