• Bitcoin has been experiencing a high level of volatility in its price, but according to a recent report from Bitfinex, it might be entering a transitional phase with lower volatility and more stability.
• The Estimated Leverage Ratio and Implied Volatility metrics are key indicators that support this analysis.
• The crypto community has received mixed reactions to the report, with some seeing it as an opportunity to buy Bitcoin at a lower price.
Bitcoin Price Forecast: Lower Volatility, More Stability
Bitcoin has been the talk of the town for a while now and for good reason. Its price has been volatile, to say the least. However, according to a recent report by Bitfinex, Bitcoin might be entering a transitional phase with lower volatility in the coming weeks.
Bitfinex’s Analysis
Bitfinex analysts suggest that Bitcoin is in a “transitionary phase” with lower leverage, fewer short-term speculators, and less volatile price action. This analysis is supported by two key metrics: the Estimated Leverage Ratio and Implied Volatility.
The Estimated Leverage Ratio measures leverage in the Bitcoin market which dropped to a low of 0.195 last week – a reading not seen since December 2021. This drop in leverage coincided with a 12% crash in Bitcoin’s price from $56,500 to $49,500. Implied volatility on the other hand has dipped to near-historical lows set earlier this year ranging between 48% and 55% for seven 30 90 and 180-day expiries (source: CryptoQuant Bitfinex).
Implication For The Crypto Market
The decrease in leverage and implied volatility suggests a possible return to an era dominated by the spot market similar to early 2021. This could mean that Bitcoin’s price may be less volatile in the coming weeks however it is important to note that this is just prediction and the crypto market is notoriously unpredictable.
Crypto Community Reacts
Overall the Bitfinex report has received mixed reactions from crypto community while some see it as positive sign for bitcoin’s price stability while others are skeptical considering volatile nature of crypto market there are still others who see this as opportunity buy bitcoin at lower prices.
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