BTC historical 30-day volatility reaches its lowest point since the start of 2020

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Volatility of the Bitcoin price in US dollars

BTC has been trading in a range between USD ~25,000 and ~31,800 since March. This week, BTC/USD historical 30-day volatility reached its lowest point since the start of 2020.

This type of environment historically has not persisted for long, data analysis suggests that some of the most significant volatility spikes have emerged out of such environments and historically, in albeit relatively short history of BTC, resolves more often than not in a directional move to the upside.

Trading activity subdued in 2023: Along with the historically low volatility, 2023 has also been characterized by depressed trading activity. For instance, so far in 2023, the average daily BTC/USD volume on Bitfinex has been USD 44.83M. In 2022 this metric stood at USD 148.37M and USD 397.84M in 2021. Considering the extent to which actors, both known and unknown, were wiped out in 2022 and 2023 as the crypto market sold-off, it is expected to see diminished trading activity.

BTC correlation with traditional markets remains low: BTC’s correlation with traditional assets has often invited speculation about changing trading windows. BTC’s diminishing correlation with the broader market in 2023 has become a significant theme. In conversation with Bloomberg in May, Ouellette commented that ‘correlations have and will continue to be dynamic in the space as adoption grows and changing investment theses dominate trading windows.’ BTC and crypto are new asset classes with a myriad of differing opinions on their nature.

BTC is viewed as a new technology by some, and a diversifying asset or store of value by others, among many other viewpoints. Correlations are likely to continue to be dynamic in the space as adoption grows and changing investment theses dominate trading windows.

Blockchain data suggests dominant BTC investor profile is long-term holder: Blockchain data shows that the percentage of BTC which has remained unmoved for over a year has reached an all-time high of 69%. Long-term BTC holders tend to be generally less sensitive to macro factors, such as Fed interest rate decisions.