Bitcoin volatility may return in 'catch up' with gold in 2023

Published at: Jan. 3, 2023

Bitcoin (BTC) volatility is declining on schedule but BTC price action could still “play catch up” with gold this year.

The latest data and analysis shows that despite sideways moves in Bitcoin, the largest cryptocurrency is behaving as expected.

BTC price volatility follows bear market pattern

With traders frustrated by a lack of tangible moves on BTC/USD, volatility is under the microscope at the start of 2023.

For analytics resource Ecoinometrics, however, there is nothing to worry about — Bitcoin is becoming more stable with time, and this is a feature, not a bug.

In Twitter comments on Jan. 2, it stated that “so far the pattern of less extreme volatile events as Bitcoin matures is confirmed.”

An accompanying chart of Bitcoin average one-month realized volatility distribution came with a description of BTC being “deep in a bear market.”

The data showed volatility ebbing at identical points in every four-year halving cycle, making 2022 firmly fit the trend of volatility decreasing more in each bear market year.

Ecoinometrics nonetheless noted that volatility is not yet at record lows, contrary to data from newer sources such as the Bitcoin historical volatility index (BVOL).

Bitcoin primed to follow stocks, gold, traders hop

In terms of triggers which could upend the status quo in volatility, investors may not need to look far.

Related: US will see new ‘inflation spike’ — 5 things to know in Bitcoin this week

In addition to the return of TradFi volume on Jan. 3, analysts are eyeing a potential game of cat and mouse between BTC/USD and gold.

“2023 will be one of the best yet for precious metals imo, will Bitcoin play catch up?” popular Twitter account Tedtalksmacro queried this week.

Comparing the two assets shows the impact of the FTX meltdown in November enduring for Bitcoin, while gold has seen a comparative renaissance. Until then, the two were in lockstep, data from Cointelegraph Markets Pro and TradingView shows.

Stocks may also provide a quicker boost to BTC price performance, with U.S. futures trending up before the year’s first Wall Street session, copying the 1-2% gains in Europe from the day prior.

“Bitcoin looks ready for continuation, but always difficult to call when U.S. opens up tomorrow,” Michaël van de Poppe, founder and CEO of trading firm Eight, predicted at the time.

“I'd be chasing the $16,6K area if you're not in a position. Targets; $17-17,1K.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tags
Bitcoin
Bitcoin Price
Markets
Stocks
Gold
Related Posts
JPMorgan turns bullish on Bitcoin citing ‘potential long-term upside’
JPMorgan, the $316 billion investment banking giant, said the potential long-term upside for Bitcoin (BTC) is “considerable.” This new optimistic stance towards the dominant cryptocurrency comes after PayPal allowed its users to buy and sell crypto assets. JP Morgan, from "Bitcoin is a fraud and will blow up" in 2017 to "Bitcoin’s competition with gold" in 2020. We've come a long way. pic.twitter.com/xceabkHaVJ — Krüger (@krugermacro) October 24, 2020 The main factor put forward by JPMorgan’s Global Markets Strategy division is Bitcoin’s competition with gold. The note, obtained by Business Insider, reads: "The potential long-term upside for bitcoin is considerable …
Bitcoin / Oct. 24, 2020
What BTC price slump? Bitcoin outperforms stocks and gold for 3rd year in a row
Bitcoin (BTC) may be down over 30% from its record high of $69,000, but it has emerged as one of the best-performing financial assets in 2021. BTC has bested the U.S. benchmark index, the S&P 500, and the gold. Arcane Research noted in its new report that Bitcoin's year-to-date (YTD) performance came out to be nearly 73%. In comparison, the S&P 500 index surged 28%, and gold dropped by 7% in the same period, which marks the third year that Bitcoin has outperformed. At the core of Bitcoin's extremely bullish performance was higher inflation. The U.S. consumer price index (CPI) …
Etf / Dec. 29, 2021
Can Bitcoin break out vs. tech stocks again? Nasdaq decoupling paints $100K target
A potential decoupling scenario between Bitcoin (BTC) and the Nasdaq Composite can push BTC price to reach $100,000 within 24 months, according to Tuur Demeester, founder of Adamant Capital. Bitcoin outperforms tech stocks Demeester depicted Bitcoin's growing market valuation against the tech-heavy U.S. stock market index, highlighting its ability to break out every time after a period of strong consolidation. "It may do so again within the coming 24 months," he wrote, citing the attached chart below. BTC's price has grown from a mere $0.06 to as high as $69,000 more than a decade after its introduction to the market, …
Bitcoin / Feb. 20, 2022
$45,000 Bitcoin looks cheap when compared to gold’s marketcap
Bitcoin (BTC) pulled off an impressive double-digit rally this year, but the digital asset has been struggling to break the $45,000 resistance lately. This level does not hold any historical importance because it has been easily breached multiple times. The same can be said for Bitcoin's $850 billion capitalization, which isn't anywhere close to silver's $1.4 trillion, or the Amazon and Google's $1.7 trillion market value. Bitcoin's market cap is often compared to gold, which has a $12.3 trillion total value and is currently the leading global store of value solution. Therefore, the answer to the $45,000 resistance might lay …
Etf / March 2, 2022
5 reasons why Bitcoin could be a better long-term investment than gold
The emergence of forty-year high inflation readings and the increasingly dire-looking global economy has prompted many financial analysts to recommend investing in gold to protect against volatility and a possible decline in the value of the United States dollar. For years, crypto traders have referred to Bitcoin (BTC) as “digital gold,” but is it actually a better investment than gold? Let’s take a look at some of the conventional arguments investors cite when praising gold as an investment and why Bitcoin might be an even better long-term option. Value retention One of the most common reasons to buy both gold …
Adoption / June 3, 2022