Bitcoin Price Aims Higher as Volume Returns, Volatility Crumbles
Bitcoin’s price was little changed at the start of Monday’s session, though a volume breakout overnight signaled the return of bullish momentum. At the same time, volatility has dropped to its lowest level in nearly three months, a possible sign that the bears were slowly relinquishing control of the market.
The bitcoin price notched a session high of $3,750.00 on Bitfinex following a sudden burst higher during the overnight session. While Bitfinex tends to skew prices upward, the average BTC/USD value was recorded at $3,695.61, according to CoinMarketCap.
At the time of writing, bitcoin was worth $3,686.60 on Bitfinex. On most major cryptocurrency exchanges, it was trading in the $3,585-$3,595 range. The current aggregate price on CoinmarketCap is $3,650.38.
The leading digital currency turned a corner on Friday, launching nearly double-digit gains on the back of a dramatic upsurge for Litecoin and other alternative currencies. In doing so, bitcoin returned above $3,550, a crucial long-term support level.
At current vales, bitcoin has a total market capitalization of $64 billion. That represents 52.9% of the entire cryptocurrency market. The total value of all digital currencies is currently seen at $121.1 billion.
Volumes Up, Volatility Down
Bitcoin’s sudden burst higher through the overnight session was propelled by a surge in trading volume on virtual exchanges. Over a 12-hour stretch, volumes increased by 14%, to around $6.5 billion, according to CoinMarketCap.
Derivatives platform BitMEX saw a bigger share of the daily action. The exchange has processed nearly 12% of BTC trades over the past 24 hours. The spot market accounted for the rest, with lesser known exchanges like CoinBene and OOOBTC seeing a larger share of the volumes. In fact, the bitcoin market appears to be highly democratized, with a bevvy of exchanges accounting for a roughly equal share of the pie.
As is usually the case, market volumes declined sharply over the weekend but remained well above the recent average. The turnover exceeded $8 billion during the initial breakout on Friday. More on that story: Litecoin Sparks Huge Crypto Rally as Bitcoin Smashes Through $3,700.
After the initial spike on Friday, bitcoin’s volatility index has declined further, reaching its lowest level in nearly three months. As of Sunday, the 30-day volatility index was estimated to be 2.16%. This number measures how much bitcoin’s daily price varies over the past month.
While volatility is often seen as a double-edged sword, its decline is a welcome sign for traders enduring the longest bear market in history. It signals that the worst of the downtrend, which was accompanied by higher volatility, has passed.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.