Bitcoin Volatility Index Suggests Large Price Move Arriving Soon

Keshav Verma

1 year ago

3 mins read

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Historical data of the Bitcoin volatility index hints that the price of the crypto may observe a big move in the near future.

Bitcoin Volatility Index Has Recently Been Below A Value Of 25

As pointed out by an economist on Twitter, the volatility index has declined into a zone that has historically been followed by an explosive move in BTC.

The “volatility index” in question is the BitMEX .BVOL index, and according to the exchange, the metric’s value “is the rolling 30 day annualized volatility of the daily 11:30 UTC to 12:00 UTC Time Weighted Average Price (TWAP) of Bitcoin / USD.”

Here, the Time Weighted Average Price is calculated using measurements made at 1 minute intervals for a period of half-an-hour.

What this index tells us is how much has the recent BTC price deviated from the average, or more simply, how volatile it has been recently.

High values of the metric suggest the crypto has shown some sharp moves recently, while low ones imply a stale market.

Now, below is a chart that shows how the Bitcoin volatility index’s value has changed during the last few years:

The value of the metric seems to have been quite low in recent days | Source: Alex Krüger on Twitter

As you can see in the graph, the analyst has marked relevant points of trend between the Bitcoin volatility index and the price of the crypto.

It looks like whenever the indicator has dipped below a value of 25, and then subsequently bottomed below the level, the BTC price has seen some significant moves that have made the metric’s value shoot right up.

There have been three instances of this trend during the last few years, two of which involved the price making a bullish move, while the third one a crash.

From the chart, it’s apparent that the Bitcoin volatility index has once again dropped down into this historical zone as the current BVOL value stands at around 24.59.

If the same trend as during the previous instances follows now as well, then the crypto might be heading towards another big move in the near future.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.4k, up 1% in the last seven days. Over the past month, the crypto has lost 9% in value.

The below chart shows the trend in the price of the coin over the last five days.

Looks like the value of the crypto has mostly been moving sideways during the last few days | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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