“A one standard deviation move for bitcoin at present is about $475,” wrote Kevin Davitt, a senior instructor at The Options Institute at Cboe. “That works out to +/- 7.3% (475/6500). Compare that to earlier this year (mid-January) when bitcoin was around $11,000. Back then the standard deviation measured $4640 or +/- 42%.”
While the decreased volatility may stave off short-term traders hungry for price action, it could be a welcome thought for legacy investors affixed to a buy and hold strategy. Of course, for long-term Bitcoin investors, this could be viewed as a positive as price stability could attract more investors.
“Perhaps we are witnessing the maturation of a market. It’s far too early to declare this the “new normal” but the persistent range over the last few weeks may be hinting at a structural shift. Time will tell,” wrote Davitt.
For more information on the cryptocurrency market, visit the Bitcoin category.