Bitcoin volatility has risen to the level of March 2020, when all markets collapsed at the beginning of the pandemic. Previously, volatility reached its highest levels during periods of a bull market.
The realized volatility of BTC reached the level of March 2020, when traditional and alternative financial markets fell due to restrictions amid the coronavirus pandemic, according to analytical company Skew. Realized volatility is calculated from the average price movement over a 30-day period. Skew measures volatility by calculating the standard deviation of the BTC price over time.
According to the company, last month this figure was 103%, which means that over the past 30 days, the price of BTC has deviated from the average price by 103%. This has been fueled by the ups and downs in the price of bitcoin over the past month. Increased bearish pressure on January 11 led to Bitcoin experiencing the largest intraday price drop.
While current volatility is similar to March last year, the main difference is that the markets are now dominated by bullish sentiment. Analysts say price fluctuations are more common during bull rallies as investors withdraw money at different points in time.
In addition, the overall volatility of BTC is decreasing: as the price and market capitalization of the cryptocurrency increased, the volatility of the asset decreased. Over the past year, Bitcoin and other cryptocurrencies have grown and perform better than traditional assets.
Bitcoin is less volatile than 112 stocks in the main US stock index, the S&P 500, according to a November report by investment firm VanEck.
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