Bitcoin’s price has been on the rise in anticipation of the halving that is to take place a few months later. The recent golden cross formation also indicated that the coin was likely to have a strong bull run. However, in less than 24 hours after the golden cross formation, the bullish sentiment drastically reversed leading to a massive drop in Bitcoin price.
The 1-hour Bitcoin chart highlighted that on 19 Feb, 21:00 hours (GMT) the price of Bitcoin fell by over 5.3 percent, taking the price from around $10,100 to $9600 in an hour’s time. At press time, BTC’s price has stabilized and is now at $9561.
Source: BTC/USD TradingView
Bitcoin has always been rather unpredictable and true to its name this week was no different. While the previous few weeks, in retrospect, it seemed like the price was consolidating, the last 24 hours once again signal Bitcoin’s volatile nature. According to the 30-day BTC/USD volatility chart, volatility of Bitcoin has been on a steady rise in the last few days.
At the time of writing, Bitcoin’s volatility is around 2.7 percent and is likely to reach this month’s ATH (in terms of volatility) around 3 percent. On February 19, the volatility for Bitcoin was only around 2.5 percent, the surge to 2.77 percent happened in less than 24 hours and is quite a rapid increase.
Source: 30-Day BTC/USD Volatility BitPremier
While the volatility has increased, the larger picture regarding Bitcoin’s volatility draws parallels to its past price movements. Yassine Elmandjra, a crypto analyst with ARKInvest highlighted how the price change seen yesterday is remarkably similar to that of December 2017. Volatility also was undoubtedly what led BTC to its ATH of close to $20,000 in 2017 and early 2018.
Today marks Bitcoin's fifth largest hourly price drop in price history.
A ~$1000 drop in under an hour.
The only other time we've seen a greater dollar price drop is at the Dec. 2017 peak.
Data via @coinmetrics pic.twitter.com/5l0eOehKu4
— Yassine Elmandjra (@yassineARK) February 19, 2020
It is also interesting to note that in the last one month, the 1-hour chart for Bitcoin showed quite a few instances where the price fluctuated in a similar way with the same margins. In the past 10-days, there were around 5 instances where Bitcoin showed significant volatility, with the price rising and dropping in around 2-3 hours.
Most of these volatile movements for BTC was within the range of 2-3 percent. The one witnessed yesterday seems to be one of the most volatile movements in the last month.
Source: BTC/USD TradingView
While 2020 was considered to be the year in which BTC will attract more institutional investors and increase its adoption as a store of value, the evident rise in volatility may not always help its case. Recently Blockchain Capital’s Spencer Bogart went on record to say that 2020 would see the ‘normalization of crypto’, but if the past few days are considered, while crypto may become normalized, the larger financial community will also need to ‘normalize’ to Bitcoin’s mood swings.
