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Bitcoin volatility: BVOL falls to 2020 level – is sharp BTC spike next?

By Alara Jordan

Edited by Charlie Mellor

11:24, 19 October 2022

A candlestick trading chart viewed through a magnifying glass
Low volatility volumes signal a lack of activity and interest in buying and selling – Photo: Shutterstock

Data from BitMEX has shown that its BitMEX 30-day Historical Volatility Index (BVOL) for bitcoin (BTC) fell to under 19% today, signalling a potential bullish trend ahead for the largest cryptocurrency by market capatalisation. 

BVOL measures the 30-day historical volatility levels of BTC against the US dollar. The level dipped below 20% on 15 October and reached 18.83% as of 19 October – this is around 80% since its peak in June where volumes were at a high of 85.18%.  

Low volumes of trading volatility indicate how much an asset has moved up or down in price, with low volatility signalling market stability. Low volumes also show a lack of activity and interest in buying and selling, a stark contrast to BTC’s rollercoaster prices and high volatility during 2021.

The last time BVOL’s index level neared 19% was around 9 September, where it hit 19.79% from where it pushed back above 20% until recently. 

BTC to USD

DOGE/USD

0.13 Price
+6.140% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

66,751.30 Price
-0.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

ETH/USD

3,506.58 Price
-0.090% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

SOL/USD

170.54 Price
+0.030% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

While past trends can’t outline future predictions, and it is always important for bitcoin investors to carry out their own research before making any investment decision, one Twitter user, Alex Krüger, pointed out how a drop in BVOL has been followed by a spike in price following low volatility levels, twice going up but also once going down. 

BTC trading volumes

Bitcoin has continued to trade around the $19,000 mark after witnessing short rallies and dips throughout the last 30 days. According to CoinMarketCap, BTC was trading at $19,206 earlier on 19 October, down 1.64% in the last 24 hours. 

The cryptocurrency slid on 13 October, dropping from $19,177 at one point that day to a daily low of $18,319.82, but BTC put on a brief rally shortly afterwards to reach highs of $19,880 the following day. 

BTC has traded near its resistance level of $20,000 at various points throughout the last month, but the cryptocurrency has been relatively steady and closer to its comfort level of around $19,000 for much of October. 

Markets in this article

BTC/USD
Bitcoin / USD
66751.30 USD
-296.7 -0.440%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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