Topic: Bitcoin implied volatility below 40 for the first time: Sign for a bull run? - page 3. (Read 543 times)

It's normal when bitcoin reaches the mid range between bull and bear run and a point of equilibrium between buyers and sellers.
People who hold bitcoin don't want to sell it because they know halving is near and there's enough bullish news (ETFs) to not be worried about near future of bitcoin.
Those who don't have it aren't buying yet because they now price is at a pivot point (50 week MA) and they want to see a strong breakout above that.

We've been experiencing the same price action in 2019 and 2020 around 9k. Smart bitcoiners were buying at 6k and below while the street woke up after 20k.
The hordes of zombies are always late for the party.

It is what we are all waiting for. Not only because of the indicator but also for other reasons, such as there is less than a year left for halving. The problem with indicators is that they serve as a guide but do not guarantee anything, although at this point we can say that the most likely scenario is a price increase.


That's another one, we can't be sure when it will start.

According to what I analysed, any major price increase this time above $37000 may lead to bitcoin getting to over $50000. I do not think people are bullish enough to get bitcoin price to reach $37000 which some people thought may be a price that the next bear market may occur before halving. As to what I am seeing now, $31000 I has been a big barrier as $30000 has been a strong support. But if bitcoin continue not to rise but less volatile as it is now, the bears might eventually win.

what I saw in the first place is that the chart is flattening and subsequent spikes are getting smaller, which is natural with a maturing asset. In my opinion, levels around ~30 may be the norm in 5-10 years. It is a pity that the chart starts from 2019 and not, for example, in 2014, so that we can observe the trend I described in a longer perspective. So 50 in 2023 could be equivalent to 70 in 2019 if you compare the volatility we see versus the volatility the market is capable of generating.

Interesting conclusions could be observed if someone superimposed the graphs on themselves. This and bitcoin. I don't know how to do it myself.

Yes it’s a good indicator however the issues are that it can trade this way for many more weeks or months. Especially since we are in the summer months.

Last week we wrote the yearly hike for Bitcoin, we all assumed we would get to $35K or so and we are back in the range. This chop is going to destroy many short term traders.

Bitcoin's expected or implied volatility*, measured by the Bitvol index, is currently trending down and has already hit values it reached only once since 2019 (in January 2023). In the occasion earlier this year, a sub-50 value lasted only for a couple of days, while in June and July the values were most of the time around or below 50.



(Source of the chart)

Both times the BitVol has hit sub-50 values (since the BitVol exists), it predated a major bullish outbreak: In March 2019, the BitVol reached 44.84, and in the following months the price exploded from ~$4-5k up to 14k (US$). In January 2023 many will still remember that something similar happened: The BitVol low of 43,8 43,93 (sorry ) was reached in the first days of the year, and less than a week later the price moved steeply upwards from $17k up to $20-23k.

Do you think a similar bullish move might happen now again?

(There were also occasions with a relatively low (~55-60) BitVol value that lead to a price decrease, like in early 2022 just before the Terra/Luna crash. However, in no occasion since the BitVol existed, a crash happened after a value of less than 50.)

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*Implied (expected) volatility as expressed by the BitVol (and fiat volatility indexes like the VIX) is a measure which is based on option prices. A low value indicates the market is expecting little price variation in the near future, making options in general cheaper, while a high value is reached often when the market fears an upcoming crash and options thus are expensive. The exact methodology of the BitVol can be seen here.

Edit: On July 28, value fell below 40, which is a new record low. Title changed accordingly.