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Bitcoin: volatility drops by half
Bitcoin: volatility drops by half
Trading

Bitcoin: volatility drops by half

By Federico Izzi - 14 Apr 2020

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The news of the day consists of the daily volatility dropping in half on a monthly basis for Bitcoin prices. After reaching the highest levels in the last six years (Tuesday, April 7th, the index has risen over 11%), in the last 72 hours, the levels fall by over 55% to just under 5 points. 

If the trend continues over the next few days of the week, the index is likely to be in the 3.5% average range that characterized the six months before the recent price collapse. 

bitcoin volatility

Analysing the declines of the past year, the theory that the downward trend in prices is accompanied by increasing volatility seems to be becoming increasingly reinforced, as is the case with the financial markets. A feature not taken for granted until a few months ago for Bitcoin’s price swings, both downwards and upwards.   

Although the cryptocurrency markets have remained regularly open even during holidays, unlike the traditional ones that were closed from Friday to Sunday, prices remain hooked at Friday’s levels, closing the fourth consecutive week upwards. 

To find a bullish structure similar to the current one, it is necessary to go back to the same period of last year, when from mid-April to the end of May the bullish strip recorded 7 consecutive weeks with higher highs and lows.

Looking at the ranking of the first 100 capitalized, the day recorded a prevalence of positive signs with more than 75% above parity. Among the first on the podium as the best of the day, there is Komodo (KMD) with more than 13 percentage points, followed by Binance Coin (BNB), which is up by more than 6%, returning over $15.5 and cancelling the decline in the second half of March.

Fans of the Binance token seem to appreciate the launch of the new token on the proprietary platform. Technically, the current structure is similar to that of the major cryptocurrencies, including Bitcoin and Ethereum, and seems to anticipate the start of a new biweekly cycle. The evolution in the next few hours should be carefully monitored.

Total capitalization remains just under $200 billion, with Bitcoin dominance continuing to hold at 64%, an average level since the end of February. Also Ethereum (8.8%) and XRP (4.2%) remain anchored to the levels of recent days.

Total daily trading volumes remain just under $100 billion, with Bitcoin closing the day on Saturday with trading volume at its lowest level in the last two months, and rising again to over $1 billion yesterday.

bitcoin volatility
                                                                                                                                 Bitcoin chart by Tradingview

Bitcoin (BTC) volatility drops

The technical picture remains unchanged with prices continuing to fluctuate around $6800 from last Friday’s lows. If the cyclical hypothesis that has been accompanying the bullish trend for over two weeks is correct, prices should enter a new cyclical phase in the next few hours. 

The confirmation will come with an increase in prices over 6900-7000 dollars and next targets in the 7500 area. Otherwise, it will be necessary to assess the extent of the further downward trend. Only extensions under 5800 dollars would cancel the upward trend started one month ago, precisely from the lows of March 13th and 16th.

bitcoin volatility
           Ethereum chart by Tradingview

Ethereum (ETH)

Even for Ether, prices seem close to kicking off the new bi-weekly cycle. Prices continue to remain hooked on the downward trendline, which combines the decreasing lows from mid-February to the present day. 

The trendline passes in these hours in the $155 area, crossing 25% of the Fibonacci retracement between the lows and highs of the last month. Current levels confirm the importance of the next directional movement. An upward rupture would draw the values to last week’s highs in the $175 area. 

Conversely, a lack of purchases would accompany the current downward slide. Extensions below $145-140 would seriously jeopardize the current uptrend that started with the double low in mid-March.

Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & Assob.it partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa Diretta.tv and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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