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Volatility of BTC and ETH at the Lowest Level in 2 Years! What Does This Mean?

  • In terms of market value, the two largest cryptocurrencies have maintained their gains since the last significant rise in June. The price of Bitcoin has stagnated in the range of $29,000-$31,000.
  • The 90-day annual volatility for Bitcoin and Ethereum has dropped to the lowest levels in the past 2 years, completely changing the historical debates about the excessive volatility of cryptocurrencies.
  • According to the data, BTC’s monthly trading volume has remained largely calm in the second quarter and throughout July. Similarly, the frequency of ETH’s turnover has significantly decreased in the past few months.

While the silence continues in the cryptocurrency market, the volatility in Bitcoin and Ethereum has dropped to the lowest levels in 2 years.

BTC and ETH Continue to Remain Silent

bitcoin-ethereum

The ongoing silence in the crypto market has brought volatility, one of the most talked-about topics, back to the agenda. In terms of market value, the two largest cryptocurrencies have maintained their gains since the last significant rise in June. While the price of Bitcoin stagnates in the range of $29,000-$31,000, Ethereum investors have been expecting a major breakthrough from the stubborn $1,850-$1,950 range.

According to data provider Kaiko, the 90-day annual volatility for Bitcoin and Ethereum has dropped to the lowest levels in the past 2 years, completely changing the historical debates about the excessive volatility of cryptocurrencies.

BTC-ETH-Volatility

Another evidence of the decrease in market volatility was the Bollinger Bands (BB) indicator. Since the June rally, the bands have narrowed for both assets, indicating a lack of vertical movement.

It is clear that a long bull market that started in June has turned into disappointment for many investors. According to data, BTC’s monthly trading volume has remained largely calm in the second quarter and throughout July.

bitcoin-trading-volume

Similarly, the frequency of ETH’s turnover has significantly decreased in the past few months, and there are very few signs of improvement in July.

ethereum-trading-volume

The decrease in trading activity may be due to a decrease in the available token supply for buying and selling on the secondary market. According to on-chain analytics company Glassnode, the supply of BTC and ETH on exchanges has been declining for weeks and has reached multi-year lows at the time of writing.

btc-exchange-balance-total-eth-exchange-balance-total

What does all this mean?

These significant declines can be explained by a shift to a long-term holding strategy or a desire to hold funds in their own hands.

The idea of using crypto assets as a safe haven has gained mainstream awareness along with a sharper decline in less risky asset classes. The recent interest shown by TradFi giants has also helped strengthen this narrative.

Against this backdrop, decreasing volatility, although unsettling for active traders, has the potential to make cryptocurrencies a permanent asset class for investors with various risk tolerances.

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Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
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