While the prices of Bitcoin have been on a rise, volatility has taken a back seat in recent times. The asset’s price has largely been oscillating to and from in $30,000 levels with eventual movements signaling at the asset’s stability.
In a recent overview, Glassnode, an on-chain analyitcs firm studied the Bollinger bands for Bitcoin, which has been in a very closed space. Bollinger Bands shows the levels of different highs and lows that an asset’s price has reached in a particular duration and also its relative strength, where highs are near to the upper line and lows are near to lower line.
John Bollinger, a renowned financial analyst who is behind these Bollinger bands calls the difference between the upper band and the lower band “the squeeze.” He says these bands are driven by volatility, and the squeeze is a primary source reflection of volatility.
Notably, such bands are defined by a series of lines that are plotted two standard deviations—both positively and negatively—away from the simple moving average(SMA) of the price of an asset. Importantly, when Bollinger Bands are far apart, volatility is high. When they are close together, it is low.
According to Glassnode, the crypto market is witnessing remarkably low volatility based on the analysis of classic 20-day Bollinger bands which has been in an extreme squeeze. Data suggests that price range of just 4.2% separates the upper and lower Bollinger bands highlighting market’s low volatility.
While the market has maintained low volatility ranges, the accumulation of Bitcoin has continued. Another set of data reported by Glassnode suggests that in a recent analysis, the number of addresses holding over 0.1+ coins have reached all-time figures.
Notably, the number of Bitcoin addresses holding more than 0.1 coins has reached 4,414,551. This shows increasing accumulation as well adoption of the asset by investors.
Amid the increasing accumulation and low volatility, Bitcoin has been showing signs of decoupling from traditional finance. As reported by Todayq News, Bitcoin’s correlation coefficient with the S&P 500, Dow Jones Industrial Average (DJIA), and Nasdaq Composite has declined significantly over 50.5%, 30%, and 49.4% respectively since the start of the year.
Simultaneously, a very smaller percentage of investors are experiencing losses considering the overall increasing price trail. While the crypto market showed signs of significant volatility last year considering the collapse of several entities which sent shock waves through the industry, the industry had marked its calm largely this year.
The market has been showing low volatility for a significant period this year despite the chances of spillage that were anticipated by analysts. Overall, amid the increasing stability and overall price actions, investors are settling comfortably for the asset.
