Bitcoin Price Regains $6,600 as Volatility Hits New Yearly Low

Bitcoin’s price swung higher on Thursday, though upside momentum appears to be limited by weak underlying momentum. That being said, a key indicator of bitcoin’s volatility declined this week to its lowest level since May 2017, signaling renewed calm in the market.

BTC/USD Update

Bitcoin’s value reached an intraday high of $6,648.80 on Bitfinex. BTC is currently trading hands at $6,586.30, having gained 1.3% from the previous session. The leading digital currency fluctuated within a $155 range on Thursday.

Trading volumes in BTC have fallen back below $4 billion, which is normally seen as a bearish indicator for short-term prices. Bitcoin typically requires daily trade volumes of at least $4 billion to generate a meaningful short-term rally.

At current values, BTC is capitalized at $114 billion, which represents 52% of the overall market share.

Despite the sudden rebound, bitcoin remains locked in a perpetual bear market that is unlikely to let up anytime soon. Recent price data show weaker rebounds and lower highs for the digital currency, which means investors can expect downside pressure to persist.

The broader cryptocurrency market added roughly $5 billion to its value on Thursday. Combined, the digital asset class is currently sitting at a value of $219.4 billion, according to CoinMarketCap. Overall trading volumes across all digital assets and exchanges fell to $12.8 billion.

Volatility Declines

Prior to Thursday’s rebound, bitcoin’s price action was exhibiting the lowest volatility in roughly 15 months, according to The bitcoin volatility index, which tracks the cryptocurrency’s price variance over time using the standard deviation of daily open prices, has declined to 2.52% in the 30 days through Wednesday.

Volatility has been in firm retreat for much of 2018, a trend that some attribute to the rise of futures trading. Contrary to popular belief, the introduction of bitcoin futures last December has been accompanied by a decline in large price swings for the digital asset.

Despite struggling to reverse the bear market, bitcoin’s supporters have established a healthy price floor at $6,000. This key level ensures that miners can continue their operations without losing money.

The leading digital currency could see larger price swings over the next two weeks as traders prepare for the next CBOE futures expiry. The current CBOE XBT bitcoin futures contract expires on Oct. 17. It is not uncommon for bitcoin’s price to fall into expiration.

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.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi