Bitcoin Volatility is Suspiciously Low

Bitcoin is famous for being one of the most volatile assets of all time. In the last twelve months alone, the price of Bitcoin has bounced from $6,000 to $20,000 and has been everywhere in between. It has been a wild ride for investors.

But despite the fact that Bitcoin has traditionally been extremely volatile, the king of cryptos has been uncharacteristically stable in the past month or so. In fact, the price of Bitcoin has been trapped between $6,300 and $6,800 since early September.

Many traders believe that the fact that Bitcoin has been going sideways for some time is an indicator that a major price move is about to occur, and that the direction that this price goes in will indicate whether or not Bitcoin is about to enter a bull market.

Which direction will the price of Bitcoin move in?

Finance experts have been debating this issue for a number of years now. However, the CEO of Circle, Jeremy Allaire stated this week that he believes that cryptocurrency tech will “make the web look like a cute experiment. According to him, crypto technology is going to lead to the tokenization of everything, including traditional stocks.

Other famous finance experts such as Warren Buffett and Charlie Munger have publicly spoken out about Bitcoin, however, and have compared it to the “tulip mania” in the Netherlands among other colorful things.

So, there is definitely not a consensus amongst top investors and finance experts about the future of Bitcoin. Buffett and Munger prefer traditional assets likes stocks, and that believe that Bitcoin is just a fad which will die out. This is contrary to crypto fundamentalists who believe that Bitcoin will last for many years to come, and could actually one day replace the dollar as the reserve currency of the world.

Implications of another price breakout

If Bitcoin does experience another price breakout, it could send the digital currency very high, as it did last year around this term. We should all know within the next few weeks whether or not the fall is going to be another good period for the cryptocurrency markets as it was last year.

There are many who will be happy when this flat period is over for Bitcoin, regardless of whether the price moves up or down. This is because it is very difficult to know whether to go long or short on Bitcoin when it is going sideways.