Bitcoin volatility falls below that of the Nasdaq and S&P 500 for the first time since 2018.
Although Bitcoin (BTC) continues to move in the same direction as traditional markets, it has recently demonstrated increased resilience to higher yields and a stronger US Dollar.
Furthermore, according to statistics provided by Kaiko on October 24, Bitcoin’s rolling volatility over 20 days has now dipped below that of the S&P 500 and Nasdaq equities indexes for the first time since 2018.
Bitcoin’s volatility, in instance, frequently dips below that of the Nasdaq, which is made up of riskier tech equities and has a better correlation with the cryptocurrency market.
Notably, crypto trading analyst TechDev pointed out on Twitter the closest relationship between BTC and Nasdaq weekly Bollinger Bands, saying:
Price vs. NASDAQ peaked at BTC’s last impulse top in April 2021 and has been consolidating during the 1.5 year correction.
— TechDev (@TechDev_52) October 24, 2022
“The weekly Bollinger Bands on $BTC / $NASDAQ are the narrowest in #Bitcoin history.” Price vs. NASDAQ peaked in April 2021 at BTC’s last impulsive top and has been stabilizing over the 1.5 year downturn.”
TechDev also anticipates a “immediate upward break and substantial Bitcoin outperformance.”
FX volatility is strong.
While Bitcoin volatility remains modest, FX volatility has increased to post-pandemic highs. Despite its early October dip, the Yen’s volatility has more than quadrupled since March, owing to the Bank of Japan’s continued aggressive monetary easing.
Meanwhile, the British Pound (GBP) had the greatest rise in volatility in September as a result of the UK government’s fiscal stimulus programs, which sparked a sell-off in British assets. The big increase in Bitcoin volumes on UK markets in September might be ascribed to traders taking advantage of substantial FX volatility.
Finbold announced on October 24 that, despite severe macroeconomic headwinds and a stagnating crypto market, Bitcoin outperformed stocks and most major fiat currencies in the third quarter of 2022, with the exception of the US Dollar Index (DXY).
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