Bitcoin Price Volatility Returns to Q1 Heights; Downturn Sends Traders to TA?

The price volatility of Bitcoin (BTC) hit a new nine-month high on Sunday, returning to the kind of flux not seen since early March of 2018.

This comes barely a month after Bitcoin volatility struck a two-year low on November 11th, when the level of flux in BTC’s market value fell as low as the 1% mark. This demonstrated Bitcoin’s ability to function as a store of value, but only for a month or so.

Bitcoin Price Volatility Rising

According to independent data sourced by Bitvol.info, Bitcoin volatility has risen by almost five percentage points in the last thirty days.

The two year low of 1.02%  was held for just one day back in early November, while the 1% – 1.99% range was maintained for little over a month, starting from October. Everything changed on November 14th when the value of BTC plunged, sparking a sudden increase to overall volatility which has risen day on day ever since.

As of Sunday, Nov 9th, BTC volatility was measured at 5.73% for the previous thirty day period – the highest since Q1 when the market was still feeling the shockwaves from spike at the turn of the year.

Looking back, all the talk of BTC as a reliable and stable store of value in the last few months now seems rather immature. Such noises were helped by BTC’s month-long spell in the 1% volatility range, and also in comparison to the uncertain flux of some major stocks and fiat currencies in the same period.

Focus Turns to TA?

Looking at the noises we make during various market conditions can reveal a lot about our collective mentality. Now that stability is no longer the flavour of the day, the focus seems to have switched from the fundamental to the technical – as evidenced by the sudden increase to Google searches for the term: ‘technical analysis’.

Since early November, searches for the term have increased by 50%, with a 28.5% increase coming in the last two weeks alone. For some context, the highest concentration of searches for the phrase within the last eight years came between December 2017 and January 2018.

The increase is unsurprising – short and medium-term traders seek to maximize gains while minimizing losses, and at the same time, long-term traders try to find out where the bottom is before they go all in.

Bitcoin Price

After a 12% decline in the past week, BTC was basically level for day on Monday afternoon as it continued to float in the $3,500 – $3,600 range.

The $3,700 mark was almost broken on Sunday evening when the coin price hit $3,685. As the day goes on data aggregators will start to register a 3.3% loss for BTC as the twenty-four hour charts fall into line.

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.

Author:
Greg Thomson is a freelance writer who contributes to leading cryptocurrency and blockchain publications like CCN, Hacked, and others.