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Bloomberg: Low volatility signals bottoming as “speculation leaves”

Christopher Attard

Oct 26, 2018

Data compiled by Bloomberg reveals that BTC only had one day of price fluctuations above 5% or more; as opposed to nine days in January and February, seven in March, and five in July.

Intelligence analyst at Bloomberg, Mike McGlone, is reported to have said that these ostensibly low volatility levels are “a sign of speculation leaving the market and eventually a bottoming process.”

bloomberg price volatility Malta Blockchain Summit

Bitcoin price volatility of (+/-) 5. Source: Bloomberg

Despite some scalping opportunities present on lower chart time-frames, price action has mostly remained locked within the $6,200 – $6,800 area. This development comes over the course of months of a clear bear market, with the major coin down almost 52% from its $13,350 of January first.

Notably, Bitcoin’s recent stability has coincided with wild price fluctuations in tech stocks of late, which another Bloomberg article described as “the new Bitcoin.” According to their data, “the spread between the 10-day volatility of the NYSE FANG+ Index” and Bitcoin has hit “a record high of 46 percentage points.”

By and large, Bloomberg analysts gave a positive outlook on Bitcoin’s tightly rangebound trading patterns, with McGlone noting that “high volatility is a major factor lessening most cryptocurrency use cases for anything other than speculation.”

London multi-asset head at Atlantic House Fund Management, Charlie Morris, was also optimistic about the calm and balanced markets, nothing that given the 10-month old bear market, he’d be inclined towards a bullish bias for the next major move.

Danial Daychopan – the CEO of cryptocurrency application Plutus – noted that “the cost of the emotional traders has been washed away by the recent crash, and with it a lot of the volatility.” The low trading volume, which has been touted among traders and enthusiasts as evidence of a ‘no trade zone’, also appears to be in line with Daychopan’s observation that the trading euphoria has dissipated in recent months.

Earlier this month, crypto and blockchain expert, Spencer Bogart, also said that Bitcoin is showing strong signs of “bottoming.” He went on to say that the developments in the crypto market these last couple of months will be “kindling” for crypto’s next bonfire.

More recently, the Intercontinental Exchange’s intention to list and enable trading of the new Bakkt Bitcoin Daily Futures Contract on its own Futures platform come December 12th is seen as a much-anticipated development that will bring confidence in the asset class on a global scale.

As of press time, Bitcoin is trading at $6,450 according to aggregated data by CoinMarketCap.

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