Bitcoin is hitting record prices of over $110,000. Yet its volatility is at an all-time low. How can this be explained?
Bitcoin: stagnation above $100,000
The logic behind Bitcoin’s volatility is expressed in a rather uneven manner depending on the direction of its price curve. Indeed, its historic break through the $100,000 level excited investors in December last year. However, just a few months later, this same price level now reflects an unbearable stagnation. A recent analysis by Bloomberg, in an article on the apparent immobility of BTC, which has been stuck in a price range between $93,000 and $111,000 for the past two months. And what about the first half of this year, with the only real volatility being a collapse to the $75,000 level, largely fueled by Donald Trump’s customs antics.
Even BTC’s recent record high of over $110,000 ultimately appears to have been a failure. This is why investors are wondering what to do next, given that the summer period is not known for bullish momentum.
According to Bloomberg analysts, the current trend is a sign of a deeper shift in momentum for Bitcoin. Indeed, it now offers “fewer opportunities for profit,” with a return of only 17% in 2025, which no longer corresponds to the minimum annual doubling of the previous two years. The reason? A lack of volatility.
A lack of volatility raises questions
To back up their claims, Bloomberg analysts refer to the Bitcoin volatility index provided by the Deribit website. This measure is designed to estimate the implied volatility of BTC annualized over 30 days. The current result is not good.
Indeed, the curve of this index shows Bitcoin volatility at its lowest level in the last two years, give or take a few months. In other words, traders anticipate continued stability in the coming weeks.
According to Michael Longoria, chief analyst at crypto trading firm GSR, which was recently involved in the launch of Polygon’s (POL) Katana network, the reason for this lack of volatility is ultimately quite simple. “Bitcoin is becoming less speculative and more like a volatile macro asset.” This is particularly true with the arrival of institutional investors and their billions of dollars, who are risk-takers, but not too much.
This change has helped mitigate extreme market effects and added an extra level of discipline to prices.
Michael Longoria
Should we consider the current lack of volatility as a mere cyclical and seasonal effect? It seems that the reasons are deeper, given the internal dynamics that are permanently changing the Bitcoin market. But there is no need to worry, as BTC still has the potential to increase 100-fold, according to the “Saylor Cycle” recently announced by Brad Mills.
