For a long time, Bitcoin has been an extremely volatile crypt currency, with sudden price changes from one moment to the next. However, despite its reputation for extreme volatility, in recent months the price of BTC has been unusually stable, even after the Halving of cryptomoney. So today we ask ourselves why there is no volatility in the price of Bitcoin.
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The calm after Halving
For most members of the crypto community, Bitcoin’s third Halving was a crucial event for the currency. Many analysts predicted in the days leading up to the event that it would lead to a substantial increase in the BTC’s price. This would correspond to the pattern followed by the two previous Halves of the cryptomone currency.
Thus, during the first months of the year, social networks were full of forecasts about how high the price of Bitcoin would go, talking about figures as high as $300,000. This, of course, prompted a race by BTC buyers, who increased demand for cryptomoney, in an attempt to acquire as much as they could before Halving.
However, after several weeks since Bitcoin’s third Halving, the long-awaited increase in its price has yet to be seen. On the contrary, the price of cryptomoney has been stagnating at around $9,000 per BTC for more than a month. Leaving the crypto community wondering what’s going on in the crypto market.
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What happened to the volatility of Bitcoin?
For many traders, volatility was not only one of the features of Bitcoin, but it was also the means by which they were able to make big profits in a short period of time. Speculation in the BTC market became one of the best opportunities for traders around the world.
So while price stability need not be a bad sign for BTC, we wonder what happened to the volatility of the currency. And there are several answers, the main one being a simple rearrangement between supply and demand levels in the market.
This was caused, on the one hand, by the drop in demand for Bitcoin following the Halving. When investors had already accumulated enough BTCs to stop buying. A drop that would have been offset by an increase in the entry of institutional investors into the market through Grayscale.
Thus, a drop in demand on the one hand, would have been matched by an increase in demand on the other. This, in the absence of other events that could have moved the market, has led to the practical disappearance of volatility.
In the meantime, traders are assuming much more conservative investment strategies, waiting for any change in the context to push or pull the price. Making this drop in Bitcoin volatility our Tip of the Day here at CryptTrend.