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There's One Major Reason Why Big Bitcoin Move Is Likely

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Wed, 10/07/2020 - 14:23
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Alex Dovbnya
Bitcoin's realized volatility has just hit a three-year low, according to data provided by Skew
There's One Major Reason Why Big Bitcoin Move Is Likely
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Bitcoin has been extremely boring as of late.

Data from cryptocurrency derivatives analytics platform Skew shows that Bitcoin's realized volatility has plunged to 20 percent, its lowest level in three years.

Bitcoin
Image by @skewdotcom

Such anemic performance by the world's largest cryptocurrency by market capitalization suggests that a major trend-defining move is likely already on the horizon.

Bitcoin remains immune to bad news

Bitcoin has been remarkably stable over the past few weeks in spite of a flurry of bad news, currently trading at $10,635 on the Bitstamp exchange.

BTCUSD
Image by tradingview.com

The market ignored the $281 mln KuCoin hack and barely budged after the feds clamped down on crypto derivatives giant BitMEX.

The U.S. stock market was also under pressure last week due to uncertainty around President Donald Trump's health, but Bitcoin shrugged this off as well.

The current week has already brought an onslaught of bearish headlines. On Monday, "crypto baron" John McAfee got arrested in Spain over tax evasion right after being sued by the SEC for illegally promoting ICO pump-and-dumps. Yesterday, the FCA also definitively imposed a ban on cryptocurrency derivatives after one year of deliberation.

Related
Bitcoin on Track for $100,000, Says Bloomberg Intelligence Analyst Mike McGlone

It's the calm before the storm

As noted by macro investor Raoul Pal, Bitcoin's 30-day historical volatility has only been this low seven times throughout its entire history.

On six out of seven such occasions, a major upward BTC would ensue with volatility surging through the roof. November 2018 was the only outlier when the top coin actually saw a major downward move.

While there is no crystal ball that can predict in which way Bitcoin will move this time, this data certainly shows that traders should start paying attention.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with 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, can be contacted at alex.dovbnya@u.today.