On-chain analysis indicates that Bitcoin market volatility is at its lowest ever period. Crypto analysts have been monitoring historical BTC volatility levels, and they have bottomed out.
The last time volatility tanked to near current levels was in late 2018. This was a similar bear market to current conditions, with crypto prices falling for the duration of that year.
Volatility shot up again towards the end of that year following the final flush out on Dec. 15, when BTC fell to $3,200.
Bitcoin’s volatility is at an all-time low pic.twitter.com/sGOIC7cM6e
— Will Clemente (@WClementeIII) December 25, 2022
Other analysts also confirmed the new low in Bitcoin volatility. The asset has traded between $15,700 and a little over $18K for the past six weeks. With most of the world in a holiday period, market activity is unlikely to pick up again until next month.
It was pointed out that a rally has previously followed periods of such low volatility. “Every time volatility fell below value ‘1,’ it was followed by a bullish rally with one exception – October 2018,” said one analyst.
Bitcoin volatility is lower than 2018 just before the 6k break
— Coiner-Yadox (@Yodaskk) December 25, 2022
Bitcoin Hash Rate Slumps
Volatility is not the only metric that has tanked for Bitcoin. The network hash rate is also declining sharply; however, the two are not necessarily connected.
According to Blockchain.com, hash rates fell to 229 TH/s (terahashes per second) on Dec. 25. This represents a decline of 16% from the all-time high in early November.
The recent fall was attributed to miners in Texas powering down due to severe weather conditions and the demand for energy grids. There have been concerns about another distressed miner sell-offbut it has yet to materialize.
Now imagine if Amazon or Google tried turning off 1/3rd of their data centers. pic.twitter.com/G49iqBZXDL
— Dennis Porter (@Dennis_Porter_) December 25, 2022
BTC Price Outlook
However, BTC has moved up to a five-day high of $16,895 during the Monday morning Asian trading session. There has not been any real momentum since the asset fell below $17K on Dec. 16, it has flat-lined since.
Crypto market capitalization is currently $846 billion, which is pretty close to the peak levels after the 2017 bull market. With a 72.5% drawdown, most analysts are in agreement that markets are close to their bottom for this bear cycle.