While BTC continues its range-bound action, analysts expect the classic volatility to be back sooner rather than later.
At the beginning of the third week of October, Bitcoin continues the same range-bound action we have seen for the past few days. A brief period of volatility was witnessed last week on the heels of the October 13 CPI report. While many expected a bullish move or a dip to macro lower lows to follow right after, Bitcoin has defied all expectations and gone back to right where it was before.
BTC/USD 7 days price chart
Therefore, a tiny trading range around $19,000 continues to be in play. The BTC/USD pair hasn’t yet made any decisive move signifying a trajectory, and we can not say for sure whether a breakout or a breakdown is to arrive next.
Reportedly, the BVOL or Bitcoin historical volatility index (BVOL) is currently seeing lows not witnessed much before. As William Clemente, the co-founder of trading firm Reflexivity Research, pointed out last week, “Equity volatility (VIX) relative to Bitcoin volatility (BVOL) is approaching all-time highs… this illustrates just how much volatility compression Bitcoin is currently experiencing”. Clemente further stated that Bitcoin might soon be going back to its usual volatile state soon enough.
In a similar statement, Alex Krueger had noted in the week prior that an “explosive move” has followed all previous macro lows seen on the BVOL index. Delphi Digital- a well-renowned crypto research firm also echoed this analysis on their official Twitter handle: “Historically speaking, when the BVOL falls below a value of 25, a large spike in volatility tends to follow shortly thereafter”.
BVOL Chart
At the moment, crypto traders can only hope for the eerie stillness in Bitcoin’s movements to vanish soon. It remains to be seen which direction the volatility would lead the BTC/USD pair to.