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Bitcoin’s Extreme Volatility Could Lead to Another Price Crash, Expert Warns. Should BTC Investors Be Worried?  

  • Alex Dovbnya
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    Bitcoin is back, but its increasing volatility could be a worrisome sign for investors  


Bitcoin’s Extreme Volatility Could Lead to Another Price Crash, Expert Warns. Should BTC Investors Be Worried?  
Contents

With the Bitcoin price spiking by 130 percent this year, investors have every reason to feel enthusiastic. However, the number one cryptocurrency recently reached its highest level of volatility since December 2018, according to Bloomberg, which is a sign that the market is “a bit stretched.”

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Trade war implications

While everyone is trying to figure out what made Bitcoin price go berserk, CNBC analysts recently pointed out the most interesting chart comes from Asia. They highlighted the alleged inverse correlation between Bitcoin and the Chinese Yuan. The idea that these two currencies are tied to each other was earlier brought up in a report from the South China Morning Post. The Yuan hit its lowest level in six months after Trump imposed harsher tariffs on the Chinese goods. Notably, this coincided with the Bitcoin price rally.

That fuels the narrative that the ongoing trade war between the US and China greatly benefits Bitcoin, but there are still skeptics who claim that there is no correlation.

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BTC shows its ugly side

Bitcoin naysayers constantly slam the top cryptocurrency for its constant price fluctuations. This month, the average daily price change reached 4.7 percent, which is higher than in December 2018 (4.2 percent) when the BTC price reached its bottom.      

Bloomberg’s Mike McGlone suggested that the peak volatility could potentially mark the top of this rally (as opposed to BTC’s price action in December).

When volatility gets high it should be indicative of extremes in price,” he said in a phone interview. “The market is getting a bit stretched here from a trader’s standpoint.”

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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