- Bitcoin has been more volatile since early October than in the past 200 days.
- The king coin decoupled from the stock market.
Bitcoins [BTC] Volatility is a hot topic of discussion in 2023. With values plummeting to historically low levels, there has been a dramatic shift in investor sentiment for an asset that was known outside crypto circles for its wild swings.
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The last month of September proved to be no exception, as the king’s currency remained suppressed throughout the period.
Volatility peak in October
However, things have changed quite dramatically since early October. This is evident from a report from the crypto trading platform BitfinexOn October 2, Bitcoin’s historic 24-hour volatility more than quadrupled.
As noted below, daily historical volatility actually remained above a 200-day exponential moving average. This essentially meant that the king coin has been more volatile since early October than in the previous 200 days.
Source: Bitfinex
Interestingly, implied or forward-looking volatility was higher than historical volatility. At the time the report was published, implied volatility was found to be 37.8%, while historical volatility was 32.4%.
For the uninitiated, historical volatility reflects the past price movements of a particular asset, while implied volatility gauges future expectations of price movements based on the prices of options contracts.
Based on this, Bitfinex analysts predicted that the current trend of increased volatility would continue throughout the month of October.
Source: Bitfinex
Bitcoin and stocks move in opposite directions
Another notable aspect of Bitcoin’s price movement in October was its decoupling from the stock market.
According to IntoTheBlock, the 30-day correlation coefficient between Bitcoin and major stock indexes such as the Nasdaq 100 and S&P 500 fell to -0.3 and -0.5. Simply put, the stock market and the Bitcoin market moved in opposite directions.
Source: IntoTheBlock
These findings were aptly reflected in the price trajectory of the assets in demand. For much of the past two months, Bitcoin saw more pronounced declines compared to the US stock market.
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Furthermore, BTC reached the bottom of its range earlier than the S&P 500 index. Historically, the two financial instruments moved on the same wavelength.
Source: IntoTheBlock
At the time of writing, Bitcoin exchanged hands at $27,591, up 0.5% in the past 24 hours, data from CoinMarketCap showed. The world’s largest asset by market capitalization registered a 16.41% jump in its 24-hour trading volume.