In case you missed it, Bitcoin enjoyed a price hike that pushed it above $40,000 within the last 24 hours. Bitcoin’s stint above $40k lasted up to four hours before downward volatility stepped in.
Amid the price fluctuation, Bitcoin’s volatility has reached a new all-time high, a situation that often presents a double-edged sword for traders and other short-term investors.
The increase or decrease in volatility means that BTC will see increased price swings. For example, from September to October 2020, BTC traded between $10,500 and $11,150. During this time, BTC volatility was between 13% and 60%. As a result of the low volatility, the BTC price was stable during this time.
Volatility increased from December to January as it surged as high as 130% during this time. The increase in volatility has resulted in BTC prices hitting a new all-time high.
BTC volatility has hit a new all-time high and prices are not hitting an all-time high or low. This is a very delicate point in the market as BTC influence may drag most cryptocurrencies along with it any way prices go.
Bitcoin may dip as low as $25,000. Other cryptocurrencies may respond and dip to levels they haven’t this year. BTC may also experience a quick surge above various resistance and trade above $50,000.
Is it time to panic about Bitcoin?
Not yet.
Based on the Pivot Point Standard, BTC is currently trading above its point at $37,000. The current price at which the king coin is trading means that the bears have not taken over the market.
The bulls are still in control but must deal with the momentary price corrections associated with the increased volatility. If the buyers persist in rallying the market, then we might see a retest of the $42k resistance, and potentially see BTC back en route to former highs
