Bitcoin’s Current Bull Market Shows Lower Volatility and Drawdowns
Bitcoin's current bull market, which began in early 2023, shows lower volatility compared to previous cycles. Key points include:
- Bitcoin's realized volatility averaged less than 50% on a three-month basis, down from 80-100% in earlier bull runs.
- The 30-day implied volatility has also declined, indicating reduced expected price turbulence.
- Increased market capitalization, now over $2 trillion, contributes to stability as higher liquidity requires more capital to influence price movements.
- The launch of US Spot ETF products and improved regulatory clarity have attracted institutional investors.
- The current rally from around $30,000 to over $100,000 features shallower drawdowns, generally less than -25%, compared to over 30% in prior markets.
- Reduced leverage on major exchanges limits speculative excesses, supporting a more stable price ascent.
These factors suggest a shift in Bitcoin's market dynamics, fostering a more resilient growth pattern.