This Bitcoin Bull Run Is Different And the Data Proves It

This Bitcoin Bull Run Is Different: Is the Era of Extreme Volatility Over?

Bitcoin has long been criticized for its extreme volatility, with bull runs characterized by abrupt, dramatic declines that would be considered full-fledged stock market bear trends. On the other hand, the most recent bull market, which began in early 2023, feels distinct in a good sense because it shows comparatively little volatility and contractions. Bitcoin’s realized volatility on a three-month rolling basis has averaged less than 50% throughout the current bull cycle, which is far lower than the 80% to 100% recorded during prior bull runs, according to statistics monitored by Glassnode.

Bitcoin Volatility Drops as $2T Market Cap Attracts Institutional Giants

According to data provider TradingView, the 30-day implied volatility, which is measured by Volmex’s BVIV index, has also been declining. Implied volatility is a forward-looking indicator that describes the anticipated price volatility over a given time frame.

The steadiness is probably due to Bitcoin‘s steadily increasing market value, which unintentionally promotes stability and more institutional involvement through derivatives and ETFs.

Boasting a market capitalization of over $2T, Bitcoin now ranks as the 7th largest asset worldwide. As liquidity deepens, and the valuation of an asset reaches these heights, the capital required to meaningfully move the price of the asset becomes significantly larger.

Additionally, the launch of the US Spot ETF Products, supplemented by increasing regulatory clarity, has altered the underlying composition of the investor base, allowing sophisticated, institutional investors and capital to gain exposure to bitcoin for the first time,

Glassnode

Bitcoin’s New Bull Market Looks Nothing Like 2021

You can observe that there were multiple significant price declines, sometimes exceeding 30%, throughout the Bitcoin bull run from $4,000 to $70,000 by looking at the price chart from 2020–21. Bear markets are often defined as a drawdown of more than 20% in conventional markets.

Now, things appear different from what they were in March 2023, when they went from about $30,000 to over $100,000. An explosive advance upward, followed by wide accumulation ranges that prepared the way for the subsequent leg higher, defines the stair-step rise.

We’ve observed a shallower drawdown profile relative to previous bull markets, with the current cycle drawdowns generally less than -25% from the local high, with only two instances exceeding -30%,

Glassnode

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