Recently, there has been a noticeable decrease in Bitcoin's volatility, attracting attention from the financial world. The value of the cryptocurrency is currently fluctuating between $110,000 and $120,000, with the 30-day implied volatility falling to 36.5%.
Reasons for Decreased Volatility
The decrease in volatility is attributed to minimal demand for hedging in Bitcoin options, despite economic uncertainties in the U.S. Market participants appear relaxed, reflected in the low current implied volatility.
Comparison with Stock Market
Parallel trends are noted in the U.S. equity market. The VIX index, which measures S&P 500 volatility, is also showing a decline, indicating a broader low-risk perception across the financial landscape.
Impact on Future Predictions
According to CoinDesk, 'With the rise in structured products and low volatility, the Bitcoin market is increasingly resembling Wall Street.' This transition is interpreted as Bitcoin's market exhibiting traits of traditional financial markets, which may indicate anticipation for future stability.
Bitcoin's low volatility may suggest a calmer market outlook with less expected short-term unpredictability. Experts remain vigilant, observing if these patterns signify long-term structural changes in the market.
