Bitcoin has fallen sharply in recent weeks but appears to have found a temporary bottom. Several indicators are turning green, while analysts speculate on a potential year-end rally for the cryptocurrency.
Volatility Index Recovers #
The price of bitcoin is becoming less volatile, according to data from various indicators. For instance, the BVIV indicator from crypto trading platform Volmex has fallen to 49.93. This marks a drop of approximately 20 percent in less than a week.
In recent weeks, these indicators were particularly high. The BVIV indicator peaked at around 62 on November 22, whereas it was hovering around the 30 mark in September.
Volatility increased significantly in mid-November due to intense price movements in bitcoin. During this period, the price of bitcoin fell sharply, dropping over 20 percent in less than two weeks.
What This Means for Bitcoin’s Price #
Bitcoin has been through a volatile period in which its price fell sharply. In the past month, the price has indeed dropped by 19 percent. However, volatility is decreasing, which means the magnitude of these recent price swings is shrinking.
In the last 24 hours, the price of bitcoin has remained flat, but in the past week, it has actually risen by more than 11 percent. At the time of writing, bitcoin is valued at $91,532.
The volatility indices suggest there is more room for price increases. The falling volatility is a sign that the period of panic selling may be over, a phase in which the market found itself in recent weeks.
Chance of a Year-End Rally Increases #
Buying pressure also seems to be increasing, analysis platform Santiment reported earlier this week. Large bitcoin holders are accumulating, which according to Santiment is a good sign for bitcoin in the short term.
According to some analysts, there is therefore a good chance that bitcoin will still make a strong move before the end of the year. For example, one analyst has predicted a possible price rally around the Christmas period, the so-called Santa Rally, which the crypto community hopes for every year.