Bitcoin’s (BTC) volatility has decreased sharply in recent days, but traders believe that this is not a positive development. According to Noelle Acheson, author of the “Crypto is Macro Now” newsletter, Bitcoin’s 30-day realized volatility has dropped to nearly 52% from 64% last month on an annualized basis.
Meanwhile, Jake Gordon at Bespoke Investment Group says the BitVol volatility gauge falls to a new low, down to 69 from over 110 in May. The CoinMarketCap data also indicates a massive drop in trading volume. In the last two days, the trading volume has dropped over 6% to nearly $25 billion.
While low volatility is considered good in the stock market, low volume with low volatility is a problem for Bitcoin. Most traders typically enter the Bitcoin market for swing trades, utilizing volatility in BTC price movements.
The crypto market, which suffered due to the Terra-LUNA crypto crisis and DeFi liquidity crisis, remains under pressure as the Federal Reserve and other central banks hike rates to curb inflation. Crypto investors, including institutional investors, have moved away from the space.