Veröffentlicht: 08.10.2020

Low volatility and high correlation to the major stock indices soon over?

BTC remains in its familiar range

For weeks the market leader has been oscillating in the range between USD 10000 and USD 11000. While the magic boundary acts as an important support area, the bulls’ attacks failed several times at the 11000 USD mark. Volatility is falling and the traditional markets are dictating the pace. However, history shows that similar situations often go hand in hand with an enormous jump in prices. We take a look at the current market situation in the crypto space.

Bitcoin jumps up in the evening

At the time of writing, the first mover has a price of 10917 USD, which represents a daily increase of 2.29%. According to this, the bulls are sniffing at the important 11000 USD mark again and in this attack the resistance could finally fall. The BTC has repeatedly bounced off this mark in recent weeks. Now a high 24-hour volume of around USD 62 billion speaks for the great interest of investors. Furthermore, the trend lines at USD 10600 and USD 10750 proved to be stable supports on several occasions.

S&P 500 plays Bitcoin into the cards

Wall Street is recovering from the damper on Tuesday and hopes for airline subsidies are causing stocks to rise north on Thursday. Currently, the S&P 500 can record a daily gain of 0.63%. Due to the high correlation, the traditional markets are also playing into the hands of “digital gold”. In addition, a 30-day volatility rate (BTC/USD) of 0.52 % leaves many investors in the belief that Bitcoin has become much more stable.

What is volatility?

Volatility is derived from the Latin word “volatilis” and means “flying” or “volatile”. In economics, the term refers to the standard deviation of changes and is often used as a tool to determine the measure of risk. In the crypto world, volatility serves as an important measure of how the value of an asset changes over time. In theory, a distinction is made between absolute change, relative change and logarithmic change. All three methods are used depending on the circumstances.

Volatility decreases

The 30 Day Historical Volatility Index falls below the important 30% mark on Thursday (current value: 28.99%). In the past, such phases ended with enormous price outbreaks on several occasions. While many traders currently perceive Bitcoin as a consolidating giant, some experts sense an impending storm. We can be curious whether the No.1 crypto currency will give the starting signal for a new bull run with a jump over the 11000 USD mark. This could result in an encapsulation from the traditional markets, as we recently experienced after the halving.

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