Bitcoin and Ethereum Show Unusually Low Performance
Bitcoin (BTC) and Ethereum (ETH) are the two largest cryptocurrencies by total market capitalization. These popular digital assets are showing an unusually weak performance in the market. Historically known for their high volatility, the cryptocurrencies are currently experiencing a decrease in the rate they considerably increase or decrease.
Volatility Overview
Volatility refers to the rate at which the price of a given asset increases or decreases for a set period of time. An asset with high volatility implies that its price can change drastically in a short time, making high gains possible but at the same time offering higher risk. Conversely, a lower volatility means that a financial product’s price doesn’t fluctuate dramatically, but changes in a steady pace over a period of time.
Volatility Report of Bitcoin and Ethereum
According to the data analytics firm Kaiko, over the last 90 days, the volatility for BTC and ETH has fallen to 35% and 37%, respectively. For comparison, consider that the volatility of oil is currently standing at 41%.
Recent Trends in Bitcoin Volatility
- In recent times, Bitcoin, the flagship cryptocurrency, has acted more like a stablecoin than a highly volatile asset.
- This unusual stability for Bitcoin has been paired with a significant decrease in trading volume.
- Recent data shows that the trading volume for Bitcoin in the previous month is at its lowest since November 2020.
- The 30-day volatility of Bitcoin is nearing a five-year low.
Bitcoin vs Traditional Market Stalwarts
Currently, Bitcoin is displaying lower volatility than traditional stalwarts such as the S&P 500, tech stocks and notably, gold which is its closest rival in terms of features and market position.
Bollinger Bands Indication
As revealed by U.Today, the Bollinger Bands, a widely used technical indicator for assessing price and volatility over time for financial instruments, provide further insights into the weak performance of the apex cryptocurrency. The ratcheting of these bands signals a reduction in price fluctuations.
- Cryptocurrency analysts have recently noted that both Bitcoin and Ethereum’s Bollinger Bands have constricted to their “slimmest on the weekly timeframe.”
- This suggests a wider shift towards calm and stability in the crypto market.
Oil Prices Report
Owing to the global economic factors, oil prices have remained somewhat stable recently. Reports suggest that worries about slowing economy in China have been counterbalanced by expectations of a tighter U.S. supply. However, Brent crude futures and U.S. West Texas Intermediate crude continue to steer through the rough seas of global economic variables.