Bitcoin Volatility Hits Four-Day Low: What It Means for Traders and the Market

COINOTAG reported on May 12th that a notable trend in Bitcoin has emerged, as data from Coinglass indicates a consistent decline in volatility over the last four days, now resting at 1.88%. This level approaches figures last recorded at the end of February, hinting at a shift in market dynamics. Typically, increased volatility is indicative of heightened speculative trading coupled with retail investor FOMO (fear of missing out). Conversely, a drop in volatility can suggest a waning interest from short-term speculators, potentially signaling the onset of a consolidation phase or a brief market “cooling-off” period.

Additionally, the fluctuation in Bitcoin’s price is frequently influenced by broader macroeconomic factors, including shifts in inflation expectations, alterations in interest rates, and geopolitical tensions. As these external conditions stabilize, a corresponding decrease in Bitcoin volatility may be observed, reflecting a more subdued trading environment.