Bitcoin has been rather unspectacular for most of 2019. However, the coin regularly has dramatic price movements of over 20% per day. A review.
Bitcoin: Surprise moves come despite low volatility
Bitcoin has experienced volatile days from 2017 to today with 20 price movements of over 20%. Lower price fluctuations are excluded. The movements in both directions had different causes – from the all-time high crash to the short-term rally. The list also includes the last 42% price swing in October.
Positive price swings were most common in late 2017, when the rise in bitcoin marked a series of phenomenal days that brought in thousands of dollars. Perhaps the worst loss was around mid-January 2018 when Bitcoin left the $ 13,000 mark and slid to around $ 9,000.
Crashes are usually unpredictable, but recovery is even more surprising as there is no warning of what factors could add hundreds or even thousands to the value. Everything can serve as an explanation – irrationally exaggerated messages as well as complete course manipulation or bot activity.
With the year-end, Bitcoin has reached a new level of stability that is now just under $ 7,200 for a few days. This level was reached in less than a trading day. But even this step cannot be compared to Bitcoin’s potential for even larger price movements.
The last big upward move brought 42% in one day
BTC has also experienced extreme gains for eleven days – however, it only crashed in nine days in the two years. The potential for price peaks contributes to the “Hodl” behavior. At the same time, Bitcoin also went through longer price slumps, which led to annual losses in value, particularly in the 2018 bear market.
Bitcoin volatility was rather low in 2019. The Bitcoin volatility index is currently 3.96%, which is close to the minimum. Since BTC has expanded its presence in the mainstream, bitcoin volatility has tended to be lower, hovering between 1% and a peak of 7%. In the early years, BTC volatility peaked at around 14%.
Rapid price increases also tend to focus in a short-term period when Bitcoin hits its regional highs. On the other hand, strong corrections are often made on a quarterly basis.
Bitcoin remains unpredictable and the path to higher valuations is not clear. The year 2020 is approaching, with the long-term upward trend remaining – albeit with the uncertainty of how and when the peak values occur and what could trigger corrections.