Relatively little has happened with bitcoin (BTC) for three weeks. The price trades flat while the trading volume does increase slightly. According to economist and trader Alex Krüger, given the current low volatility, we can expect a large move in the near term. Krüger shows this on the basis of a graph shared on Twitter.
Bitcoin volatility is low
The economist tells his 146,000 followers that the current bitcoin volatility is quite low. Volatility is the degree to which the price moves up and down. And looking at the price chart of bitcoin on Bitvavo, for example, we can quickly confirm that volatility is very low at the moment.
If the volatility decreases, the chance of more volatility increases. Krüger shares the following chart, showing a number of moments when volatility was also so low:
“Every time BVOL [Indicator die bitcoin volatiliteit weergeeft] below 25, an explosive bitcoin movement soon followed. Twice up, once down (November 2018).”
every time $BVOL closed below 25, an explosive bitcoin move soon followed. Twice up, once down (Nov 2018). pic.twitter.com/mao9F44K22
— Alex Kruger 🇦🇷 (@krugermacro) Oct 9, 2022
As can be seen, the volatility indicator, called BVOL, has fallen below the 25 level three times before. The first time was in 2018, when BTC fell by 50%. The second time was a year later when bitcoin managed to rise 240%. The last time the BVOL indicator fell below 25 was a while ago, namely in 2020. When bitcoin rose by 35%.
Another explosive bitcoin movement?
Of course, nobody knows whether a wild movement can arise again. Well reminds Krüger reminds us that some important economic data will be released next week. “Core CPI above or below consensus by 0.2% or more next Thursday could cause it,” the economist said. If the figures deviate slightly from expectations, this could trigger such an “explosive” price movement.
In short, time to keep a close eye on the crypto news!