Bitcoin’s price has returned to above $70,000 after weeks of sideways price action. However, recent boredom and side hustle are not necessarily a bad thing. In the past, such declines in volatility have preceded the largest gains in the largest cryptocurrency in history. Let’s take a look.

Bitcoin’s historical volatility hits record lows

The term volatility often has a negative connotation. For example, Oxford Languages ​​defines volatility as “susceptibility to rapid and unpredictable change, especially for the worse.” In financial markets, this term refers to how much and how quickly a price changes over a specific time period.

To measure volatility, technical analysts exploit a historical volatility metric, which compares volatility over the lifetime of an asset’s price timeline. Using such a tool, analysts can compare and contrast past periods of high or low volatility in assets such as Bitcoin.

The inclusion of this tool in BTCUSD shows that within 2 weeks the highest cryptocurrency by market capitalization is emerging from the lowest volatility phase in its entire existence. More critical, however, is the fact that the last two times BTCUSD has been this dull, it has led to increases of over 9000% and over 2000%. The latest made Bitcoin a household name, with its price rising from around $1,000 to almost $20,000 at its peak in 2017.

Now the signal is back, but what could it mean for the cryptocurrency market and holders who have been waiting for the recent sideways price action.

Third time’s a charm: Can BTC grow by 200-500%?

Volatility is cyclical. After periods of high volatility and rapid price action, the market enters a lull during which prices move painfully sideways. When sideways boredom ends, it usually ends with a bang and a return to the explosive price action that was evident before the lull.

Volatility can also be measured and even predicted using “implied volatility”. However, it is impossible to accurately predict the direction in which volatility will be released. Given that volatility is most often associated with negative sentiment, there is at least some possibility that low volatility could be broken by an extreme decline in Bitcoin’s value.

However, two recent cases suggest otherwise, and the recent trend is upwards. While BTCUSD likely won’t see another 9,000% surge or a 2,000% surge like it did in 2013 and 2017, the first-ever cryptocurrency could see gains of 200% to 500%.

At 200% and a price of $70,000 per coin, Bitcoin could peak this cycle at around $140,000. At a 500% shift from its current level, Bitcoin could reach $350,000 per coin. Higher multiples are indeed possible, but unlikely given the law of diminishing returns.

Tony Severino, CMT is the author CoinChartist Newsletter (VIP).. Subscribe to free. Follow @TonyTheBullBTC & @coinchartist_io on Twitter. Or join Telegram TonyTradesBTC for daily market insight and technical analysis education. Note: The content is for educational purposes and should not be considered investment advice.

Featured image from ChatGPT, charts from TradingView.com