Bitcoin fell more than 20% over the past week, going from the heights of $40,000 and dipping around the $30,000 level before sustaining itself above $32,000 over most of the weekend. According to Skew analytics, Bitcoin’s realized volatility – the average price deviation from daily Bitcoin prices over a 30-day period – is at its highest since the infamous Black Thursday market crash back in March last year, which saw Bitcoin nosediving to the $4,100 mark.
Bitcoin’s price has seen fluctuations of up to 103% from the average price. Shared by Crypto Unfolded, the graph shows that Bitcoin’s realized volatility levels have been creeping upwards steadily since the last quarter of 2020. The global financial market crash of March which took the world by storm saw volatility levels shoot above 300% was an unexpected event, and current levels have not yet eclipsed that of July 2019.
The bellwether cryptocurrency is known for its volatility, and no other time is it as volatile as it is during market crashes, for one, and secondly, during bull runs. Considering that volatility is a feature of crypto assets, it stands to reason that during periods of price surges, realized volatility will be higher than average.
Critics frequently point out Bitcoin’s volatility to deter potential investors from placing their funds with the digital asset, but in the past year, at several points throughout the year, some other traditional assets were found to have surpassed Bitcoin in this aspect, such as WTI crude oil in the second quarter of 2020. Similarly, in November last year, Bitcoin’s volatility rate was found to rank lower than that of 145 stocks listed on the S&P500 index.
