Topic: Bitcoin implied volatility below 40 for the first time: Sign for a bull run? (Read 456 times)

And perhaps the final update to this thread:

The low implied volatility phase seems to have ended. Since a couple of days, the BitVol has broken the value of 50 again to the upside, reaching even 60 in one occasion:



Source: T3Index BitVol

As the "realized" volatility looks not too different than in the last weeks (we still see no really wild price swings, only we climb from one level to the next ...) it seems that the increase is primarily caused by options prices finally recovering.

Meanwhile the price also broke the 32k resistance, rallying up to the 34-35k area in only a few hours and staying there quite stable.

So I would say that the assumption I made in the OP looks to have materialized, even if it took a long, long time to do so (but as in other occasions before, the low-vol phase as a whole preceded a price increase). It's however too early to confirm this is really a "bull run" like those we had seen in the past. But it doesn't look bad, at least for now

Small update: The very low implied volatility phase is still ongoing. The BitVol index stays firmly below 50. The long term chart of the indicator shows how unusual this is (at least since 2019):


Source: BitVol

Even if BTC failed to cross the 32k resistance level sustainably (until now) and it even looked a bit bearish during some time, with some below-25k dips, it seems that the assumption I made in the OP could be still intact: that after this low-volatility phase a bull run could be starting.

It seems however the low volatility phase is unusually long this time, and the recent little swings up to 30k and down to 26k haven't really changed that. A look at the "realized" volatility long term chart confirms that even if we compare the current period with data from pre-2019, never such a long low-vol period has been recorded:


Source: BuyBitcoinOnline

Seems simply we have to wait a little bit more if the assumption will become true.

I think Bull Run will occur when the end of the year or about 2 or 3 months, even though the market is currently red but the chance of Bull Run is always easy if there is a positive sentiment and the big issue that occurs is the beginning of 2024 there will be a Halving Day which will make a request on Market increases significantly.

Volatility is on the rise again. Even before the dip yesterday, the BitVol went up to 43 (which was still a low value). Until now there was no further update, but I expect it now to be close to 50.

However, what I would like to discuss is if the theory that volatility is currently "mispriced" on option markets which was brought up by Glassnode and I commented some days ago, could have favoured the deep flash crash which in some exchanges even went lower than $25000.

If put options were very cheap, then this was an opportunity to abuse it in a way very similar to a short:

1. Buy put options (Put options are those allowing you to sell Bitcoin for a fixed price, the so called "strike price".). When the BTC price was at 29000-30000, you should have been able to buy put options with a strike price of $28000 or so for cheap.
2. Wait for bad news, then join forces with other whales which created short sales, and dip the price.
3. Sell the (much higher priced) options.

Should yield a quite good profit, perhaps more than in a "regular" short sale operation.

I am sure that to people like me everything is a sign for a bull run. I get that some stuff do not mean anything and maybe this doesn't mean anything neither, but at the end of the day if this means that we are going to end up with a profit the new are going to end up with a profit. That's how it happens and we should be considering it as a profitable thing. Obviously not everything works that way, sometimes it goes down as well, and these type of things causes it to drop lower.

But considering the volatility is low, that means even just a small spark could cause a huge fire for bitcoin to go up. This is why we need that little part to start it all, and we are waiting for that to start soon enough, it should probably happen soon.

We’ve been consolidating in a really tight range for what feels like an eternity. Would be really good if we break out to the upside soon. There are murmurings of extreme downside in legacy markets soon though. Big Short Michael Burry recently shorted stocks with over 90% of his net worth (does he know something?). Hopefully bitcoin doesn’t follow stocks if that is the case, problem is though it usually does.

https://amp.cnn.com/cnn/2023/08/15/investing/michael-burry-stock-market-crash/index.html

Whatever the current price is certainly a good opportunity to buy. We are still half the price for the last ATH and a chance to collect bitcoins before the halving is reached. Hopefully near or after the halving we will enter into the bull run market that everyone has been waiting for. Those who start entering will have a great opportunity to benefit than those who just delay entering without doing anything. Year-end price target might be him over $40k and that's still pretty reasonable, we're still seeing bitcoin in the $29k-$3k price area today but that's about to jump high soon, looking forward to the best for bitcoin.

Of course we hope the bull run comes soon, I would like to see this year close at least $60k so that makes a good start for the bull run which will be in 2024 when the halving day happens, when prices are as cheap as they are now then a good opportunity to buy.

Today the Bitmex 24H volatility index hit a new all time low. Basically Bitcoin has never traded in such a tight range ever.

If it wasn’t for all these KYC exchanges then perhaps one could buy some calls/puts and bet on this volatility to explode some day. Most likely sometime in the fall. However we have no idea knowing which way it will breakout.

BitVol turned down again in the last days and now we've seeing the almost incredible value of 36.4 (the last low was 37.08). I guess thus the short but hefty increase I reported in my last post had to do with the slight BTC/USD price increase some days ago.

It has been speculated that another sign for an incoming bull run are long positions taken by some Bitcoin whales. For now, I still think a dip down to 28K is possible due to "sideways market fatigue", but there are quite many signs that the mid-term outlook looks quite positive for Bitcoin's price.

BTW: It would be cool if some people with knowledge on options prices could comment on the question: do you think Bitcoin's volatility is currently mispriced?

Definitely a sign for a bull run, doesn't guarantee that it will be a bull run, but it does make it look a lot more like it is going to happen. This is why we should be a bit more careful about what we are doing, and should focus on what the result could be.

I understand that it is not going to be simple, but we need to make sure that things go easier for us on the long run as well. I get it, it is not simple and I really do get it, but that doesn't mean that we need to make sure that we are ready for anything. The bull run is not that easy and that should not be that simple and we should be ready for both going up and going down and if we are ready for both of it then we should be considering the situation according to how it goes.

Yes, it is true, Bitcoin volatility is pro-cyclical and nowadays Investors may have lost faith in institutions like governments and central banks and turned to Bitcoin as a safe haven, but, nowadays it is a bit difficult to understand Bitcoin price fluctuation even though we know the volatility of the US stock market has an effect on the long-term volatility of Bitcoin. indeed, if we also look at Google Trend regarding the index spike Volatility is closely related to coinciding with major events, both positive and negative in the money market.

Right now the Bitcoin price range in the market is also still around $30K and even less, but for the optimists most of the people who believe will see a price of $50K in Bitcoin may only be for the end of this year or before the halving occurs. Because the bull run probably won't happen in the near future, but expecting an increase before the halving I don't think it would be wrong either, because with that kind of expectation I think it will encourage some people to continue buying before the price increase occurs.

In a sudden turn, the BitVol index jumped 10% up to 44. And that without the Bitcoin price leaving the current range of 28.6-32k - it's even still in the "inner" range of the sideways channel, 29-30K.

I can only speculate on the reasons. (Remember, the BitVol index is calculated using option prices, so if options are cheap, the index has a low value. I write that because in many of the previous posts the topic switched to "historic", i.e. "realized" volatility, not implied volatility).

First, there was a small, but relatively sudden price increase yesterday. This could have "waked up" the people trading on option markets, and remembered them that we're still not registering Forex volatility values

This could be a bullish sign: People could be buying call options, to be able to buy BTC cheap if it goes up.

Second, Glassnode has published a newsletter recently, where they speculate about option prices being undervalued:


Source: https://insights.glassnode.com/the-week-onchain-week-32-2023/

Volatility "mispriced" refers to options being "too cheap". Of course, if a major Bitcoin analysis firm publishes such an opinion, this could have implications on the real options market: people now could be buying options, realizing that there may be an opportunity if they really are "mispriced".

By the way, the "realized" volatility stays very low at 0,79% according to the Bitcoin Volatility Index.

Since March when the price touches $ 30k, many are optimistic that the price of $ 50k will be easily achieved before June, now it is August and the price looks difficult to rise, even in May the price has dropped below $ 25k, and we hope that the market will improve soon so that Bull Run will soon occur.

If anyone is trading, there is still the possibility to make money through good limit order discipline however it would take a long time to get a return, and it would be a true test of patience. If I were to speculate, a drop is imminent. The price never stabilizes in this way before a rally, usually there is a sharp dip to liquidate longs, followed by a quick rebound upward.

It is possible that the ETF and the EDX market news was just to provide more liquidity for the year, as whales sell-off prior to another dump, then when all of the infrastructure is ready the run will continue again. I also suspect a covid-like event to spark the next run too, and more accelerated. As people won't buy into it again and instead, will be angry at the tyranny behind it.

In my opinion, we have slowly to say goodbye to the halving incited cycles. IMO the bull run in 2019 was already a sign that halvings now don't matter anymore. But just the Covid crash you mentioned, clearly an external factor - the fears started already in January 2020, which had flattened the recovery after a bearish short-term trend in late '19 - may have prevented BTC from reaching an ATH before the halving in this occasion. It was very close: in 2019, almost 15000 were reached on some exchanges, and the ATH was lower than 20000.

I however agree with you that there's no need to become delusional just at every slight sign for a possible bullish move. However, the volatility data is at least ... very interesting (It's also a good long-term sign, we're clearly trending towards stabler prices again, which may be good for further adoption, after the 2022 volatility spikes.)

I agree about the 32K as a major milestone, although I'm not a fan of weekly charts in a 24h/7d asset like BTC I'd change it to: "5 days above 32K and we're a step further" in the bull market.

I could agree with that, but I think once we're past 35K volatility may go up again - to the bullish side. So if we see 35K in September, I believe we'll see at least 50 K (even if it's only a short spike) before the end of the year. 35K, or any value significantly over 32K, would break all MAs and EMAs to the upside, so the impression of the general public will be that Bitcoin left the problems of 2022 (FTX, Terra/Luna) behind and the community is optimistic again.

Bitcoin has essentially been flat for the past 4 months (of course with some volatility in there from $25k-$31k during that period, but overall flat), so eventually yeah it'll break out, and probably fairly soon. I would guess it'll break out of this ~$30,000 range by end of August, maybe getting up to $35k in September. I'm expecting to see $40k get hit before the end of the year.

We all know that halving is near and, on every bitcoin move, you will say people saying that this is a bull season start time. They will link every bitcoin pump, dump or no volatility to the sign of the start of the bull season.

If we see the past data, we will see that there is a major bitcoin crash very near to halving, last time it was a covid crash. I am not saying that we will see another major crash before the start of the bull season, but we still cannot say that the bull market is officially started.

Seeing the price action, bitcoin needs a weekly confirmation over 32K and then we may say that we are in a proper bull trend.

The condition of the Bitcoin price today is still in an increasing condition to go to $ 30K again, although I would not consider that to be the end of the bears, because a decline in prices is still possible. But in the current conditions I am more confident that an increase to return to $ 30K is very possible and for the bullrun period it will probably be more visible in the next year, not this year although Bitcoin still looks stronger in the current price range with a more directional price bounce to the top.

In my opinion, this is the impact of Macroeconomic problems and the crypto industry, as a result, the price of Bitcoin has fallen again and experienced a bear run. So the question is whether BTC has bottomed out and ended the bear run period? If BTC is able to breakout from that point, then we will get confirmation that the bottom has passed and is ready for the next bull run and always beware of the Bull Trap, of course.

Yeah the last few days is completely flatlined. There were many periods where you assumed there was some feed error because the prices weren’t changing.

Not only that but if you look at the time and sales the overall volume is just dreadful. Even don’t get too many trades which are greater than 1 BTC. Most likely will be like this to middle of September or early October. Unless there is some big event.

For the first time in history, the BitVol index yesterday fell below 40. Today it fell even further and currently is at 38.22. That all with Bitcoin's price still keeps firmly in the 29-29.8k range.

See here.

I wonder if this is an opportunity to buy some Bitcoin options and selling them more expensively. Put options seem to be the natural choice if you believe the price will go up. But will it? I think it will, but I'm still not convinced there won't be still some sideways weeks ahead or even another dip, and in the option market, timing is important.

The EthVol index, tracking implied volatility for Ethereum, tracks even lower: at 36.37, also a record low. I wonder why, because traditionally the EthVol has been higher than the BitVol (for example, EthVol's 1-year high is around 110, while BitVol's around 92), and a lower volatility on BTC is also expectable due to BTC's higher trading volume (almost double). Perhaps people are expecting an "altcoin season" and thus altcoin buyers are (very slightly) more optimistic.

Historic volatility is also at a record low: the 30-day BTCVI is at 0,75%, for the first time beating the lows of early 2013 and early/mid-2016. This is however something I'm expecting, as the trend should in general move towards low volatility.

Yeah the range is just horrible. Basically when the weekly high or low breaks with volume and you are at the computer you can take a good trade out of it. The problem is that it’s still summer and there is a good chance it will just be another wick.

Look how bad the price action has been these past few weeks. Traders are just losing money trading this awful chop. Most likely until September it will trade this way.

Volatility typical means down as many prices usually gain ie. the current action does not meet the overall trend seen over years.   True enough BTC has risen greatly but we all know it can fall harshly sometimes.  So BTC has greater volatility then most assets but cant be described in that way continually.  We sometimes go sideways like presently also which some find equal to a negative,  I dont as I think higher volume leads to confirmation at those prices and 30k could be an important area.
  My take for 2023 is that we'd not be positive especially, escaping the 2022 negative was a big thing but we are more shackled to old price action then allows us to bounce back in this volatility buoyancy kind of way.   We do have both pictures, the sideways indifference currently is us being caught between recovery and selling that must happen to honor old holders now wishing  (or requiring) to return back to FIAT cash.   I'm surprised more people dont cash out as the yield on Dollar rose alot and similar other currencies its a big headwind for any other asset to argue with.

The BitVol trends lower and lower and has now marked a new all time low (remember that the index only exists since 2019):


Source

The previous record low was 43,93 and was reached in early January.

Option traders are as confident as never before (since 2019) that the current price is fair. This is in my opinoin a bullish sign or at least a sign that no crash is ahead, but of course external events could always change the picture.

We believe that a major increase will continue, hitting the areas that we never saw after a long time. I remember there were lots of people saying that once we broke the $31k barrier, we will then see $35k or more but it seems blurry since we are only getting stuck at $31k and we even fell under it sometimes. This again proves that BTC is totally unpredictable and there are no patterns that we can follow strictly.

We are almost out of the bear market. I think what you mean is once we hit $37k, a bull run will then be officially started which I can agree since its kinda high. Maybe when the price is already high enough, $37k will only be our lowest if in case a bear market happens.

I seriously do not know if it's for a bull or bear, I can't guarantee anything at all. However, if we put what we have in front of us, we can easily say that it's not going to be that much of a hard time deciding what's going to be the case. Like we have halving next season, been up a lot this year, and we are getting end of the year for our Q4 period as well.

When you combine all these, you know that in the crypto world all these matters, and that shows that maybe an increase is quite likely and could happen. That is why it's going to be very important and we could make some difference without a doubt. I just hope that it doesn't get to a point where things go "too" wild because in that case everyone will be in panic mode for sure.

Of course I do, because we have no data other than such indicators. But time has taught me this. No indicator tells us exactly what will happen in the market.

There is no single situation or person in the market. Many uncertain events prevent the things we predicted to happen as a result of the data we review. Since we have seen such things before and our forecasts do not hold, I examine the indicators, but I do not invest according to them.

Interesting theory. I agree that the evolution of these two indicators can partly explain the volatility decrease: the long-term decrease (which we can also see in the "historic" volatility chart) is very likely related to a better distribution (alongside with increased liquidity), while the self-custody increase (and thus: "more time until you can press the sell button") could explain a further lowering since 2022, i.e. a mid-term effect. Maybe even the Ordinals/BRC-20 chain congestion could explain volatility decrease a bit, because it made transfers to exchanges (or using instant exchanges) more expensive (this effect is currently waning a bit).

These factors very likely also contribute to the current low values. However, I think there is something more: volatility in early 2023 was still significantly higher than now. This can be partly related to the price evolution: when the price jumps upwards, volatility grows naturally, not only due to the price jump itself but also due to short-term downtrends resulting of profit taking. It seems however the current 29.5k-31.5k corridor is extremely stable and already is almost a month old. The small 1% dip below 30k today was one of the most significant ones, and recovered fastly. There seems to be enough confidence to "eat" all attacks on the 30k level, so while I can imagine a dip as low as 28k if all bears unite force, it could lead to a short squeeze afterwards, boosting the price finally to 32k.

Do you know that Bitcoin price unexpectedly as i portrayed in my previous comment in another thread, provided that what triggers the increment of bitcoins price, that's to say bitcoin price is is depending on the volume of the market, and mostly when the demand is high, it's very clear that the demand helps to skyrocket the price, so comparing yearly prices of Bitcoin is dependable on the yearly demands which i believe that the demand of Bitcoin can be higher now due to it have lesser supply and lesser negative information or speculation that can make the market crash. I want to remind you that what makes Bitcoin price in 2017 to increase in value is as results of more investors come in into the industry and any year such happen bitcoin price get elevated, so Bitcoin price alway fluctuate in market.

It can be explain, at least partially.
First of all, there's 2 indicators that are peaking, while the BitVol is reaching all time lows. These two indicators are the number of addresses containing over 1 bitcoin.



Why is this important? Because it shows distribution. Not all of the addresses are new users, but it's very likely that the number of individuals holding a positive balance has never been this high. The more users - the less volatility.

The other important factor is the amount of bitcoin held in self-custody. FTX probably worked wonders in this matter, showing millions of people how dangerous holding money on exchanges can be.
People who hodl are less prone to panic moves and don't get easily mislead by FUD and mainstream press.

Might not be such a fresh indicator for some, but certainly at the back of my head I've always had it in my gut that when it's been majority sideways for a really long time, it's the calm before a storm. Now, whether that means volatility following a bull or a bear, never been able to tell.

It's the age old conundrum. Low volatility suggests consolidation for a show of strength. But is it for the bull or bear? I doubt there's strong evidence to point to either side, and even the chart seems 50/50 in either direction, correlating low volatility, and spikes, with price direction.

I wouldn't know if this would be a good way to start or a bad way to start a bull run, but it is certainly "something" to see. When something rarely happens, that doesn't mean that something major will happen, but usually it means that something rare already happened. I assume that volatility could be lacking due to the fact that we have been stuck around 30k dollars price range for a long time now and I am seriously expecting it to not change any moment soon. This is why its going to be a bit different, we need to make sure that everything will be fine and nothing goes wild. Of course its going to be hard to just sit tight and wait for the price to be steady forever, but eventually it will move, so just be patient for now.

I don't believe of course that it's a rule written in stone. However, the correlation seems very strong (see below). My explanation is this: Option prices reflect the amount of fear in the market (because you will probably buy options if you want to either protect yourself from a fall or to be able to buy for a good price but aren't sure if it doesn't go lower). If option prices are low, that means that there's not much panic to be able to be triggered, the market participant are relaxed and aren't staring at the chart all the time for a possible crash. This makes it difficult for bears to penetrate a support, and easy for confidence to build up. So basically the "rule" could be: the lower the lows in the implied volatility, the higher the probability of a substantial price increase.

Let's examine the BitVol and the price evolution in a single image:



(sorry for the weird look of the price chart, had to stretch it because the BitVol image has an "irregular" x-axis).

We see that while there were some instances where a "mid-level" volatility of 70-100 led to a decrease in price, there were only two instances where a value about or lower than 60-70 led to a crash or substantial price decrease: the first in early 2022, i.e. before the Terra/Luna debacle. One could argue that Terra/Luna was an anomaly: there was a lot of confidence before that price could recover, but an "external" event, a large sale of BTC by the Terra/Luna project and big turbulences in the altcoin market led to the crash, and then the late-2022 period before the FTX crash (the sideways market around 2022), which had also low-mid BitVol values, but again we have a strong external event triggering the crash here. All other instances of low BitVol values led to price increases.

Macro-trends like those reacting bullish to halvings (in my opinion caused mostly by price increase expectations and not by the slightly decreased supply, as I'm not a fan of the S2F theory) have of course also influence on confidence, and thus on option prices. Thus, the low volatility is not necessarily "causing" a price increase, but it's a "byproduct" of the increasing confidence due to other factors.

Bullish trend will always be the effect of a good demand for the specific project and with Bitcoin price is not the usual basis but its volume. As we can see right now we are slowly getting there and volume to challenge the resistance level is getting stronger. Volatility is always with Bitcoin and yes if we are going above $37k then we might see the $50k level as well. The price movement is getting more bullish, its an indication of an upcoming bull market.

Is there anything fundamentally important about going below 50, as opposed to slightly above 50 values? Because on this chart there's a lot of times when the index was close to 50, and it didn't result in bull markets.

Volatility is periodic, but just like with the price, there's no clear patterns that could allow predicting the next movements with high confidence.

Also, this chart clearly shows the effects of halvening and its bull market. The whole period of 2020-2021 - the time of bull market, had high volatility, because there was a lot of price movements, both upwards and downwards. And the bear market had periods of stagnation, just like the previous bear markets.

So if the price and volatility will increase in the near future, it wouldn't be because the value dropped below 50, but because the halvening is coming soon.

Not flattening but rather decreasing of volatility slowly on a longer time frame. Time frame is just the difference but the pattern of decreasing volatility is the same on different time when bullrun occur.


Yeah, Having this kind of more data will give as a better sample to determine the pattern in long term. But since 2014 Bitcoin volume on exchange is damn small, I think the volatility that time will be off the chart and will messed when add to the current data. I remember Bitcoin price back then change more than 100% in a short period of time.

At least since 2019 it seems that the BitVol never stayed that low for a long time. It did stay in the 55-60 range for some weeks however in some occasions. Unfortunately the index isn't calculated for the years before 2019, and I think options weren't that common in these years. What we have is historic volatility data (not implied, but "real" volatility):



Source

If we compare that with the BitVol, there are similarities but also some differences (the spikes in 2019 and 2020 are much higher in historic volatility than in implied volatility). The longest low-volatility phases according to this chart were in late 2012 and late 2016. In these occasions, they were also predating bull runs.

At least another "higher high" was recorded, which is in general a bullish sign too.

@Heisenberg_Hunter: It looks like you're right, that we need an external "push" by some positive news to finally leave the 30-31k range. If BTC continues to trade in this range however for some weeks more, then two things could happen (taking into account historical sideways markets): Confidence in the price could build up, we would see perhaps even lower (record-low? I think the lowest value was ~43 and we're at ~46) BitVol numbers, and then even a minor buy could trigger to break out of the current range. Or the contrary: traders get disappointed and sell their long positions slowly, and then some short sell attack could be successful to dump again to ~27-28k.

For me, the first scenario is more likely, mostly because of the BitVol showing increasing confidence (lower option prices), but also by chart patterns like the very slowly increasing highs and the strong support near $30k. And of course the SEC decisions are quite important too and there is this time a higher probability of a positive outcome there.

Blackrock's ETF filing has sparked interest from institutional investments in large scale, but the SEC's stance tends to exercise a minor pause towards the resumed interest. As of yesterday, SEC has accepted the application and the official review process has begun thereby signaling either a positive or negative outcome in this filing. Since this is a long process, a positive outcome from SEC might push Bitcoin towards the official start of the bull run right before or after the halving. But, to the contrary if SEC has a negative stance (which is most likely possible), we might see a minor pullback during the halving and gradually the price may pick up the pace due to the increase in demand.

Volatility may also be considered as a governing phenomenon in this case, but a huge positive news is mandatory for us to break and move beyond the bear market. At this moment, it is increasingly difficult to trade in short term as we may never be able to time the market perfectly since the prices can go either ways. OTOH, Bitcoin is becoming a matured asset and it's volatility is going down gradually which can be seen as a positive factor for large institutions to step into the game.

Additionally, according to S2F model the price of Bitcoin may be able to reach a presumed target of $40k-$50k by the 2024 halving which is neither too high from the current $30k price which denotes a lower volatility as well. Considering these factors, a bullish move is much very possible before the halving but if unavoidable factors such as SEC going against exchanges or Blackrock tends to come into play, we may see a minor drop before the bull.

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.)

---

*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.