Crypto Market May See Renewed Volatility as Whales Begin to Accumulate BitcoinCalm waters do not last long in bitcoin, so be prepared for a sharp move here shortly, one observer said, referring to the cryptocurrency’s ultra-low historical or realized price volatility.December 22, 2022 by Omkar GodboleThe crypto market has recently held steady, with bitcoin locked in the narrow range of $16,000 to $18,000 amid lingering macroeconomic uncertainty and FTX contagion fears.The perplexing tranquility may soon fade because bitcoin’s historical volatility hits levels last seen before the late 2020 bull run and investors with ample capital supply begin to accumulate coins.”The quiet price action of the past month is illustrated by [bitcoin’s] low realized volatility. Not counting the moment leading up to the FTX fallout, which had slightly higher volatility than what we have now, this is the lowest level for realized volatility since the third quarter of 2020, just before the last bull run. Prior to that instance, volatility was this low at the bottom of the 2018 bear market,” Blockware’s weekly report said.Realized volatility refers to the magnitude of daily price movements, irrespective of direction, over a specific period. It’s a backward-looking metric, while the implied volatility is forward-looking, revealing options traders’ expectations for price turbulence over the coming week/month.The realized volatility is at the lowest since 2020. (Blockware Solutions)The situation, however, could change after the holiday season, with traders snapping up options and pushing implied volatility higher relative to historical volatility.Signs of whale accumulationThe renewed accumulation of BTC by whales, or investors with ample capital supply and the ability to move markets, is another reason to expect some action in the market.The chart shows renewed accumulation by whales since BTC fell below the June low in early November. (Whalemap)The white line is bitcoin’s daily close price (UTC), and the bubbles’ size represents the number of coins accumulated by the whale wallets.At press time, bitcoin traded flat-to-positive near $16,900, according to CoinDesk data.
This article was originally published by CoinDesk.
