March 11, 2020

Bitcoin Volatility Increase: Can A Digital Currency Overcome A Fall After Success In 2020?

The global financial market has staggered and entered a phase of uncertainty due to the current difficult conditions. Amid falling stocks and bonds on the stock exchanges, the massive sale of oil reserves, the decline in the value of cryptocurrencies can go through the mass consciousness. Many people get the impression that, due to their specifics, cryptocurrency is more stable in contrast to traditional financial assets.

The fall of Bitcoin below $ 8,000 has worried about the cryptocurrency community. This situation means that the volatility of the most popular digital currency continues to grow. According to the latest data, over 10 days, Bitcoin volatility reached a record high of 73%.

The Bitcoin price swing downward has stalled a bit over the past few days. We can already see the positive changes. If you evaluate the data for March, the volatility of Bitcoin increased by 10 points. Now, this indicator is 64%. In the first three months of 2020, Bitcoin volatility was 58%.

A 10% increase in realized Bitcoin volatility was also observed earlier in mid-January. This situation was triggered by the dissemination of information about a possible bearish decline in the price of Bitcoin and the growth in this demand for gold as a safe resource for investment.

It is envisaged that the volatility of Bitcoin will continue to grow. This will happen as a result of the conclusion of a large number of contracts for Bitcoin options. If you look at the indicator of implied volatility, the situation is practically no different and it remains to be desired. For 3 months this indicator is 3.5%. 

The increase of Bitcoin volatility is also evidenced by the situation with the sale of Bitcoin options. Contracts that were concluded after the Bitcoin exchange rate fell below $ 8,000 have a strike price of $ 6,000 to $ 7,500. This suggests that the options were sold below the current level of the market value of Bitcoin.

The Bitcoin price swing downward has stalled a bit over the past few days. We can already see the positive changes. If you evaluate the data for March, the volatility of Bitcoin increased by 10 points. Now, this indicator is 64%. In the first three months of 2020, Bitcoin volatility was 58%. 

Despite the massive concern, we can now see small positive changes. The contracts for Bitcoin options that were concluded yesterday have a higher strike price. This indicator is 7250 US dollars. 

Disclaimer

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.

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