Bitcoin Price Volatility Suggests Rally Is Far From Over
In recent days, Bitcoin price has lost its grip on the $30,000 level and has dropped back down to the $29,000 level. Naturally, this had some effect on the market, dragging some other currencies with it. But metrics point out that this drawdown is just a temporary setback for BTC. As per the volatility, there are still some ways to go before the rally comes to an end.
Bitcoin volatility drops to January 2023 levels
According to new data shared by on-chain analytics platform Santiment, Bitcoin’s volatility could point to a continuation of the bullish run. The digital asset’s volatility has been on the decline and has now returned to levels not seen since January 2023.
Most of this decline in volatility can be seen after BTC broke through the $25,000 resistance. As the price continued to rise, so did the volatility. The last time volatility was this low was after the FTX crash in 2022. This triggered a drought that saw the price of BTC drop dramatically along with its volatility. However, the price spiked when volatility hit 2023 lows earlier in the year.
Volatility returns to January 2023 levels | Source: Santiment
Since then, volatility has been on what can be described as a rollercoaster trend, reaching higher highs before subsequently dropping. In April, BTC’s rise above $30,000 saw volatility rapidly diminish, which could be good news for the cryptocurrency.
Why BTC May Continue to Rebound
Looking at the chart shared by Santiment, it is quite evident that the price of Bitcoin frequently rose when BTC volatility fell so low. Going back to January, the chart shows that after the drop in volatility, BTC price immediately skyrocketed.
The January rally was the start of what would turn out to be a very profitable first quarter for the cryptocurrency market. By the end of March, BTC and other coins had added around 50% to their value. Eventually, the pioneer cryptocurrency reached a 9-month high above $30,000.
If history were to repeat itself once again, BTC could be seeing another rally right now. A recovery from that point could see the digital asset breach the $35,000 resistance for the first time since May 2022, which would further solidify BTC’s entry into another bull market.
At the time of writing, BTC is changing hands at a price of $30,400. The coin rose 3.18% on the 24-hour chart and gained 1.58% on the hourly chart.