For the first time since 2020, Bitcoin’s volatility has fallen below the Nasdaq and S&P 500 stock exchanges. The cryptocurrency’s 20-day realized volatility measurement, which tracks daily price changes, has remained relatively stable over the last three weeks. Could this newfound stability indicate that Bitcoin’s price trend is finally decoupling from the traditional stock market? Here’s everything you need to know about Bitcoin volatility. High interest rates and inflation spiked stock volatility. At publication, Bitcoin trades at just under $21,000. Though far lower than the height of the crypto boom, when BTC hit $69,000, it’s remained around that mark. However, in contrast, recent Federal Reserve rate hikes have sent traditional stock prices tumbling. Although, recent speculation that the Fed’s aggressive rate hikes are working has sparked a market rally. It’s still up in the air whether or not the Fed will continue its trend of 75-point rate hikes at the next meeting on November 1. Bitcoin volatility is finally stabilizing after the Terra USD collapse. Crypto data analytics firm Kaiko made the report regarding Bitcoin volatility. According to their research director, Clara Medalie, Bitcoin’s price has stabilized since July, shortly after the collapse of Terra USD. However, Medalie says that recent trends could indicate that Bitcoin could diverge from the stock market. “The divergence in market activity […] suggest cryptocurrencies are more resistant to the recent volatility-inducing macro events,” Medalie told Decrypt. Crypto enthusiasts have long awaited the day digital assets shift away from traditional finance. Unfortunately, at least for now, it seems Bitcoin still follows the stock market’s ebbs and flows. Decrypt reported Bitcoin’s correlation coefficient on October 21 was 0.3. The closer that number is to zero means a lower correlation. At publication, Bitcoin’s correlation coefficient sits at .5 for the S&P 500 and .58 for the Nasdaq. Regardless, the fact remains that Bitcoin is currently more stable than traditional asset classes.
In this article:Bitcoin, Blockchain Technology, cryptocurrency, interest rates, Nasdaq, recession, s&p 500, stock m
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