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Bitcoin price currently more stable than Nasdaq and S&P 500
More action in equity indexes than in BTC.
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25 Oct 2022
Volatility near 6-year lows
Bitcoin’s 30-day volatility is currently lower than that of the Nasdaq and S&P 500 while nearing a 6-year-low, sitting slightly higher than low levels recorded in 2018, 2019, and 2020.Bitcoin’s 30-day volatility sits at levels rarely visited for long. Bitcoin’s 30-day volatility is currently very near a 6-year-low, sitting slightly higher than low levels recorded in 2018, 2019, and 2020. From previous price history, we know that BTC rarely stays long at contracted volatility levels, and traders should not expect the current regime to represent a new norm. Source: TradingviewThe summer of 2020 was the last time volatility reached similar lows as those of today. BTC maintained levels below the current levels for 4 days before the price exploded up. Volatility then fell again as BTC reverted toward its consolidation range.In March 2019, BTC’s 30-day volatility maintained levels lower than the current levels for 6 days before the price exploded up, as BTC recovered from its bear market bottom.In November 2018, the 30-day volatility trailed at lower levels for 17 days before BTC’s volatility exploded as BTC’s $6k support was shattered and BTC reached lows of $3k. You may utilize options to bet on growing volatility. The current volatility regime is unusually low compared to the previous history while also sitting at levels that rarely last for long. Historic volatility tends to impact options prices due to backward-looking volatility expectations. Currently, implied volatilities for longer-dated expiries sit near 2-year lows, making straddle strategies appealing. Source: TradingviewBitcoin’s 30-day volatility is currently lower than that of the Nasdaq and S&P 500. Nasdaq’s 30-day volatility sits at 2.1%, S&Ps at 1.9% compared to BTCs 1.4%. This has only happened twice since 2017.Interestingly, BTC’s volatility has plunged lately, while the 30-day volatility of the S&P 500 and Nasdaq has seen a steady uptrend. Structurally, BTC’s declining volatility vs. the rising U.S. equity volatility bears a stronger resemblance to November 2018 than July 2020.November 2018 saw volatility rising in equities, while BTC’s volatility dried off, whereas the summer of 2020 saw volatility flattening across asset classes.