As an analyst with extensive experience in the cryptocurrency market, I’ve witnessed firsthand the wild price swings of Bitcoin over the years. However, the recent trend of decreasing volatility suggests that Bitcoin is maturing as an asset class.
In more straightforward terms, Bitcoin‘s price swings have noticeably mellowed down compared to before. There haven’t been any major price surges or crashes since the most recent halving event occurred.
Such a trend of dwindling volatility signals maturity, according to experts.
Bitcoin Sees Signs of Maturity
Over the last week, Bitcoin experienced a modest decrease of approximately 3%. During this period, there were more sell orders than buy orders on most exchanges. Based on data from Kaiko, the total trading volume for significant Bitcoin trading pairs amounted to $518 million between June 10th and 14th. Notably, Binance and Bybit experienced the greatest amount of selling pressure.
I’ve observed that Bitcoin went through price fluctuations last week due to macroeconomic news. However, as a researcher studying this digital asset, I believe Bitcoin has reached a new stage of maturity in the year 2024. This is indicated by its decreasing volatility.
Since early 2024, Bitcoin’s volatility over the past 60 days has stayed below the 50% mark. In stark comparison, volatility levels during 2023 frequently exceeded 100%, indicating significant price swings.
In the year 2024, Bitcoin experienced its greatest volatility peak on record. However, according to Kaiko’s analysis, this peak paled in comparison to the over 106% volatility surge witnessed back in 2021 when Bitcoin hit its previous price highs.
According to their research, the introduction of Bitcoin ETFs for trading in the United States had a limited effect on the cryptocurrency’s volatility in the long run.
As a crypto investor, I’ve noticed that the bitcoin market has been displaying less volatility than usual over the past year. One possible explanation for this could be the shifting market structure. While it’s important to note that this might not be the new norm, the US market closing now represents a larger share of trading volumes. This means that BTC liquidity is becoming increasingly concentrated around the East Coast trading window.
Stronger Selling Pressure
The increased selling pressure than buying demand in bitcoin trapped its price below $70,000.
As a crypto investor, I’d interpret Matteo Greco’s statement to CryptoPotato this way: Last weekend, I noticed a significant price drop in the market. According to Fineqia International’s research analyst, Matteo Greco, this downturn was driven primarily by increased selling volumes from miners. Why? Because of the third Bitcoin halving event, which reduced block rewards from 6.25 BTC to just 3.125 BTC. This change in reward structure made mining less profitable for these miners, compelling them to sell their holdings en masse, thus impacting the market negatively.
In spite of a modest 4% decrease in hash rate following the halving event, intense mining competition has compelled miners to enhance their operational efficiency by optimizing capital usage. This can be paraphrased as “Despite a minor 4% reduction in hash rate post-halving, robust mining competition has pushed miners to seek profitability through multiple revenue streams and improve their capital utilization.”
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2024-06-18 19:20