Crypto investment management firm Matrixport has published its latest weekly report, highlighting a notable increase in Bitcoin‘s 30-day realized volatility, which has now exceeded 60%, surpassing its long-term average. This spike in volatility is of particular interest to traders and investors, as it presents both risks and opportunities in the market.
Bitcoin’s Volatility Peaks at 62%
Matrixport’s report indicates that Bitcoin’s 30-day realized volatility has climbed to 62%, higher than its long-term average of 58%. Historically, when realized volatility exceeds 70%, these periods are brief and provide profitable opportunities for traders who sell high levels of implied volatility. Conversely, purchasing volatility is generally more advantageous when realized volatility drops below 30%.
Since June 21, Bitcoin’s price has fallen by 12%, aligning with historical trends where the cryptocurrency market tends to decline during the summer months before experiencing heightened volatility. This pattern is expected to persist, particularly with several upcoming events that could significantly impact Bitcoin’s market behavior.
What Events Could Impact the Crypto Market?
Notable events in September are being closely monitored for their potential to influence Bitcoin’s price and market sentiment. These include the release of US employment market data today, a presidential debate between Kamala Harris and Donald Trump on September 10, and the Federal Reserve’s interest rate decision on September 18. These developments are considered vital in shaping the market’s short-term direction leading up to the US presidential elections on November 5.
Key Inferences for Investors
Concrete and valuable user-usable inferences for investors from this report include:
- Periods of high realized volatility (over 70%) are typically short-lived and offer selling opportunities.
- Buying volatility tends to be profitable when realized volatility is below 30%.
- Tracking significant political and economic events can provide insights into potential market movements.
While the cryptocurrency market remains unpredictable, Bitcoin’s price has decreased by 1.46% in the last 24 hours, now trading below $56,000 at $55,946. The total market capitalization has also contracted by 1.39%, dropping below $2 trillion.