Volatility Dropping, Price İncrease to Follow Soon?
Commodity trader and strategist Mike McGlone said the volatility rates will continue to drop as long as cryptocurrency markets continue to mature. McGlone said in the emerging asset class, the volatility is a normal thing but this tends to disappear when the markets mature enough the handle it. He said:
“This is a maturing market, so volatility should continue to decline. When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging, and arbitraging.”
History suggests after the decline in the volatility rates, Bitcoin tends to form a strong rally and many hoping that could be the same once again.
An early investor of Coinbase, Vincent Tan said low price range will help institutions to join the cryptocurrency sphere as he said:
“The crypto winter generally makes it safer for super-long-term oriented Yale-model institutions to enter at a price that isn’t dangerous. You know what is scary? Investing and then immediately seeing an 80% drop. That is hard to recover from.”
Meanwhile, a cryptocurrency analyst Danny Les said a period of consolidation and low volatility tend to make Bitcoin more expensive. He said:
“Any extended period of consolidation or ranging is usually the run up to a fairly strong move. That said, opinion is mixed on whether that move is up or down. When you’re analyzing charts, generally higher highs and higher lows are the indicators of a positive move up. Lower highs are probably not the best thing to pin hopes to in expectation of a rally. However, this is Bitcoin so [it is unpredictable].”
Les also added:
“Unless already comfortably in profit, a drop in volume is never something one wants to see when in a position. The overall sentiment attached to crypto probably isn’t the most positive. Bitcoin effectively nose diving since last years all-time high has created a steady wave of retail interest decline across all crypto markets.”
Les said he thinks one more shakeout will likely to happen. He said:
“I suspect that there will be more blood before any kind of serious rally up. Volume and price, certainly in Bitcoin’s case need to pick up before we get to near Christmas, otherwise we will see the year out with a very negative sentiment attached.”
We will eager to see how the situation will develop in the coming months. It should be pretty interesting!