Bitcoin’s price undulations became the calmest in three months on Tuesday, as volatility revisited levels last seen ahead of the “Black Thursday” crash on March 12.
The leading cryptocurrency’s 30-day volatility has now fallen to 40%, the lowest level since March 6, according to blockchain analytics firm . Meanwhile, 60-day volatility declined to 52.18%, its lowest since March 11.
The decline in volatility may be associated with the lack of clear directional bias in the market.
rallied by over 150% in the two months leading up to the May 11 mining reward halving. Since then, however, the buyers have repeatedly failed to establish a foothold above $10,000. At the same time, downside has been restricted to around $8,600.
The range has tightened in the last few days, with the cryptocurrency trading between $9,300 and $9,900.
A prolonged period of low-volatility price consolidation often paves the way for a big move on either side. The longer the consolidation, the more violent is the breakout/breakdown.
However, while the cryptocurrency is stuck in a narrowing price range, the volatility metrics haven’t yet reached abnormally low levels.
Thirty-day volatility is still hovering well above 32.84% – the low reached on Feb. 15. Bitcoin topped out near $10,500 in mid-February and fell by over 63% in the following two weeks.
Historical data shows that bitcoin tends to chart sudden big moves following a fall in volatility to or lower than 35%.
For instance, volatility hit a low of 35% on Sept. 21, 2019, and in the following three days, the cryptocurrency fell by nearly $2,300. The sharp rise from $6,800 to $9,500 seen in January was preceded by a drop in volatility to a multi-month low of 33%.