Bitcoin volatility lower than 2017 levels as price smashes $51K

Bitcoin volatility is not at the same level seen during the 2017 bull run but analysts still say lower price swings are necessary to maintain upward momentum.

Bitcoin (BTC) has hit a new high above $51,300 in a continuation of its bullish advance that begun in October 2020.

According to Bloomberg, the current run is different from the 2017 bull rally that topped out below $20,000 in terms of volatility.

Indeed, data from Woobull Charts puts Bitcoin’s 60-day volatility at 14.25%, a significant decline from the over 32% recorded at the zenith of the 2017 bull run.

Bitcoin 60-day Volatility. Source: Woobull Charts

However, in terms of realized volatility, Bitcoin’s price swings are still orders of magnitude higher than gold. Data from crypto analytics provider Skew puts Bitcoin’s current three-month realized volatility at 90% — more than five times the actual price move for gold as reported by JP Morgan analysts.

In a note to investors, JP Morgan analysts argued that Bitcoin’s current price rally is unsustainable unless volatility decreases significantly. Part of this assessment likely comes from the rollercoaster January where BTC rallied 46% to almost reach $42,000 before declining over 30% to fall below the $30,000 price mark.

For Bloomberg strategist Mike McGlone, the current Bitcoin price swings are only temporary with the market expected to calm down. According to McGlone, the growing institutional BTC adoption will force Bitcoin’s volatility below even that of gold.

Tesla recently announced a $1.5 billion Bitcoin purchase while business intelligence firm MicroStrategy continues to expand its BTC ownership.

Earlier in February, U.S. crypto exchange Kraken issued a report predicting that Bitcoin’s continued upward advance will be accompanied by reduced volatility.

According to Peter Brandt, Bitcoin is in yet another parabolic advance with the largest crypto by market capitalization printing about 75% in year-to-date gains thus far.

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