Bitcoin price fell faster and lower than expected, leaving a trail of liquidations and investors in shock. Crypto prices rose more than 50% across the board and in most cases have already recovered by at least 25% of the loss.
The sudden roller coaster ride after such a steep climb makes sense and increases volatility. Aside from the fact that there is so much chaos in the market right now, it is still nothing compared to what the cryptocurrency is used to. This fact could suggest that the bull market has only just started with the recent crash.
Compare crypto to an exhilarating ride through a theme park
Theme parks can be a blast. Roller coasters are particularly fun, but they can definitely give you a good scare. The ride starts slowly, slowly and methodically climbs to further increase the anticipation as the altitude increases.
Once you’re high enough, it’s hard not to stop paying full attention to the ride in order to get a load of the view. At this moment the momentum turns and you are back where you started in a flash. Sound familiar?
Related reading | Lack of “surrender” volume suggests that Bitcoin is doomed to more downward movements
Bitcoin, like roller coasters, can have many twists and turns, and this final crash wasn’t very different from the usual cryptocurrency behaviors.
The last year of “only up” was much more unusual. Bitcoin usually rises and falls, wiping out 60 to 70% of the price per coin and market cap. Only now, with a crash of only 50%, is volatility increasing, indicating either another collapse, just the beginning of the bull run, or possibly both scenarios.
Historical volatility suggests that the Bitcoin is only just getting warmed up | Source: BTCUSD on TradingView.com
HODL On: The infamous Bitcoin volatility has only just returned
Historical volatility is a tool used to measure how volatile an asset is over its history. When Bitcoin was in the earliest stages of pricing, volatility was insane, and after the dust settled it stayed flat for several years.
It wasn’t until late 2017, when crypto prices had risen, that the bull market really took off and historical volatility returned to Bitcoin.
Related reading | Bear phase fractal warns of pain, Bitcoin Bull Market remains unbroken
Except that it took even less time than before. Even the small upward trend of USD 14,000 in mid-2019 led to higher volatility in the cryptocurrency market overall.
Even after a massive $ 28,000 per coin collapse, Bitcoin’s volatility is still unusually low today. This latest shock in the market could only be the beginning of an impending storm. Can you hold on and survive
Featured image from iStockPhotos, Charts from TradingView.com