Bitcoin (BTC) Volatility Dwindles: ‘Boring’ Price Action Explained

Bitcoin has become significantly less volatile in recent times. This is evidenced by the absence of any extreme spikes in price movements in either direction since the completion of the fourth halving.

Such a trend of dwindling volatility signals maturity, according to experts.

Bitcoin Sees Signs of Maturity

Over the past week, bitcoin saw a modest decline of a little over 3%, with selling activity outweighing buying across almost all exchanges. According to Kaiko’s latest findings, the cumulative net trading volume for major BTC trading pairs reached $518 million between June 10th and 14th, with Binance and Bybit witnessing the highest level of selling pressure.

Kaiko stated that although bitcoin experienced price swings as a result of macroeconomic news last week, it appears that the digital asset has achieved a new level of maturity in 2024, which can be seen in its diminishing volatility,

Bitcoin’s 60-day historical volatility has remained below 50% since the beginning of 2024. This starkly contrasted with the massive fluctuations observed in 2023 when volatility surpassed 100%.

In 2024, BTC reached an all-time high in terms of volatility, but Kaiko said that this peak was only 40% – which is far lower than the over 106% volatility spike witnessed back in 2021 when the asset recorded price highs.

Even the launch of spot Bitcoin ETFs in the US had a relatively muted long-term impact on volatility as per the firm’s analysis.

“While it’s too early to suggest that this is the new normal, changes to bitcoin’s market structure over the past year may help explain why price action has been relatively ‘boring.’ The US market close now commands a higher share of trading volumes, as BTC liquidity becomes more concentrated around the East Coast trading window.”

Stronger Selling Pressure

The increased selling pressure than buying demand in bitcoin trapped its price below $70,000.

In a statement to CryptoPotato, Fineqia International’s Research Analyst, Matteo Greco highlighted that the price drop over the weekend was influenced by high selling volumes from miners impacted by the third halving event that slashed the block rewards from 6.25 BTC to 3.125 BTC.

Despite only a 4% hash rate decreasing post-halving, strong mining competition has forced miners to optimize capital efficiency. This essentially indicated “strong competition in the mining sector, with businesses forced to find various revenue streams to stay profitable and optimize capital efficiency.”