The Bitcoin prices have fallen close to two-month low recently as the risk aversion weighs on the crypto market. To this, a reputed Bloomberg analyst suggests that there could be some positive on the horizon for Bitcoin.
As reported by Todayq News, Glassnode’s weekly report had suggested that the Bitcoin market has reached a stage of apathy and exhaustion with extreme low volatilities on record along with several other indicator. Additionally, it had stated that in such a case, the market could show motion in either sides. Now, with such historic low volatility, some analysts have predicted have positive time coming ahead.
In his recent tweet, Mike McGlone, Bloomberg senior Macro strategist, analyses the potential of a big Bitcoin price pump given that volatility measures are at all-time lows. Using a graphical representation he explains that most likely the volatility of the market will recover itself and show some positive results.
Further, he states that the 180-day volatility for Bitcoin fell to about 46% on Aug. 16 the lowest ever. Additionally, aside from decreasing volatility for asset classes, McGlone highlights that Bitcoin has shown divergent weakness versus the stock index since the end of first quarter.
Keeping this in mind, the analyst thinks that the Bitcoin volatility can also show signs of recovery if the S&P 500 leads the opposite direction and declines. According to him, market volatility typically rises when the S&P 500 retreats.
Additionally, the current trend in Bitcoin is its adoption as digital gold, but with volatility roughly three times that of the metal, relative crypto risk or volatility has room to decline. To this, McGlone highlighted that Bitcoin traded at around 10 times the risk of gold in 2018, demonstrating the cryptocurrency’s maturation over the years.
It is worth noting that the largest digital asset by market value dropped as much as 3.1% to lows of $28,230 in today’s trading. The decline was the largest intraday since August 1. As of writing, Bitcoin was down 2.50% in the last 24 hours to $28,399.
Notably, the current low volatility seen on the market often entails a relatively weak influx of demand. As analysed by Glassnode, the Realized Cap is climbing, but only very slightly, suggesting a very boring, choppy, sideways market may remain on the road ahead.
However, on the other hand, marking a major stance, the conviction of Bitcoin investors seems to remain impressively high, and very few are willing to liquidate their holdings. This is as the supply held by long-term holders continues to increase, hitting an ATH of 14.6 million BTC. In direct contrast, short-term holder supply has declined to a multi-year low of 2.56 million BTC.