Bitcoin Volatility Falls Below Nasdaq Amidst Rare Trading Lull
Bitcoin's volatility has dropped to levels not seen in years, falling below that of the Nasdaq stock exchange. According to data from K33, Bitcoin's 30-day volatility has reached 1.132%, its fourth-lowest reading since 2020. This is a significant drop, as historically, Bitcoin has been more volatile than traditional risk assets.
In fact, this is only the fifth time on record that Bitcoin's 30-day volatility has fallen below the Nasdaq's. Previous periods where this occurred saw sharp price moves, with some resulting in gains of over 20% and others leading to declines of up to 40%. K33 notes that based on past price action, 'we can conclude that the current volatility compression reflects an abnormality, and we should brace for a larger move shortly.'
The subdued trading activity has also extended to the spot market, with average daily Bitcoin spot volumes reaching multi-year lows at $1.63 billion last week. This decline in volume is likely contributing to the low volatility seen in Bitcoin.