Bitcoin Volatility Starts 2023 at a Record Low
Volatility has declined sharply since 2023. Over the past nine days, the flagship cryptocurrency has been much more stable than the index,, and the. Altcoins, on the other hand continue to be a prominent part of the market despite some frantic short squeezes as well as promising developments in industry.
Bitcoin Volatility at Record Low
Bitcoin’s volatility has been stubbornly flat in spite of a calm derivatives market and low trading activity. Arcane’s digital assets research and analysis firm reported that Bitcoin’s volatility over the past seven days is well below 2022 levels, indicating that the most popular cryptocurrency is flat.
BTC’s 30-day volatility is at an all-time low, which has not been seen since June 2020. Bitcoin has been more volatile than gold, the DXY and NDQ since the beginning of 2023. In BTC by Arcane, the period in which BTC’s volatility falls below all of these indexes simultaneously is called “relative volatility compression”.
Research showed that such periods are rare and that the current relative volatility compression event is already at an all-time high. According to the report:
“Apart from last September’s September 29 observation, all relative volatility compression events were followed by volatile days with sharp bounces and frantic markets within the next 30 days.
Options implied volatility, which is traders’ estimate of volatility for the remainder of the option life, has fallen to all-time lows over a variety of expiries. The report stated that the IV for 1, 3 and 6 month expiries are at their lowest levels.
Bitcoin trades at $17.442.35, an increase of 0.9% in the last day. Over the past seven days, the flagship cryptocurrency has risen by 4.5%. It has remained flat since November 1, when Bitcoin suffered some losses after the collapse of FTX.
Altcoins Rally amid Short Squeezes & Promising Developments
Bitcoin has been experiencing unprecedented stability. However, there have been some altcoins that have experienced a significant price increase for different reasons. Over the past few days, metaverse tokens and altcoins that are heavily shorted have experienced nice price rebounds due to substantial liquidations of short positions.
Solana’s native currency gained 15% on January 3. A renewed interest in the token resulted in nearly $8.9million in short liquidations materializing. This was the largest short liquidation in over a month.
The price movements of certain altcoins have been affected by the promising developments surrounding’s Shanghai Upgrade, especially the native tokens for liquid staking protocols. The code that will allow withdrawals of ETH staked on the Beacon Chain will be included in the Shanghai upgrade.
Lido Finance (NASDAQ:), Rocket Pool (NASDAQ;), StakeWise and Frax are the most popular liquid staking platforms on the market. These projects make it possible to join ETH staking even without having to run a validator, making them a more attractive option than staking the traditional way.
These native tokens have risen as Shanghai’s upgrade is scheduled to be completed by March 2023. Over the last week, Lido’s LDO gained more than 53%. Rocket Pool’s RPL has risen by 21.4%, while StakeWise SWISE has risen by 31.8% in the past seven days.