Bitcoin Volatility Plummets to Multi-Year Lows, Capitulation Signals Fire
The volatility of Bitcoin has plummeted to its lowest point in years, hitting 27.2% annualized, according to asset manager VanEck.
This reading is significantly lower than the long-term average of around 80%, and it's a key metric that VanEck uses to identify potential capitulation points.
VanEck notes that all 12 of its capitulation signals have hit their extreme zones in the past three months, with eight still firing as of August 12th. This suggests that Bitcoin is currently experiencing a period of intense selling pressure.
The current drawdown of -49% looks relatively mild compared to prior bear markets, but VanEck argues that these comparisons are misleading due to changes in the market landscape since then. The fact that spot ETFs and institutional investors now hold significant positions in Bitcoin means that this cycle may play out differently than previous ones.
The 30-day realized volatility of -49% is a key indicator for VanEck, which suggests that the market is currently experiencing a period of high selling pressure. This is supported by the fact that spot trading volume has remained at historically low levels since August.