After Bitcoin has experienced bouts of suppressed volatility it has averaged 200% returns over the following months
Before the recent surge to $12k, bitcoin had been seeing remarkably stable price action.
It went sideways for months and months, dropping the annualized volatility numbers down into a very interesting zone.
A zone between 30% and 15% annualized volatility.
Going back to 2012, bitcoin had only dropped below 30% annualized volatility 12 other times.
In almost every instance, volatility then exploded higher shortly after, and so did the price.
Check it out:
(Source: ~~~ embed:1293232838746218498/photo/1) twitter metadata:a3Jha2VuZnh8fGh0dHBzOi8vdHdpdHRlci5jb20va3Jha2VuZngvc3RhdHVzLzEyOTMyMzI4Mzg3NDYyMTg0OTgvcGhvdG8vMSl8 ~~~
As you can see, when volatility gets down into that range, it doesn't stay there for long and not only does it leave that range shortly after, but often in an explosive manner.
What to expect...
History rarely repeats exactly, but it sure does rhyme a lot.
And if we look at the average outcomes from these scenarios, we can get an idea of what "might" happen this time around.
Based on the data, once bitcoin has entered this compressed volatility pocket, it tends to see a spike in volatility that peaks around 140% and a gain in price of around 196%.
And this all happens within the next 3 months...
Check out the data:
(Source: ~~~ embed:1293233164631060480/photo/1) twitter metadata:a3Jha2VuZnh8fGh0dHBzOi8vdHdpdHRlci5jb20va3Jha2VuZngvc3RhdHVzLzEyOTMyMzMxNjQ2MzEwNjA0ODAvcGhvdG8vMSl8 ~~~
Given the fact that we entered this range back on July 24th and at a price of $9,500, repeating those averages would see bitcoin hitting $28k by the end of October.
That is a little under 3x the current price in a little over two months.
While that may sound a little crazy, remember that bitcoin makes all it's gains for the year during it's ten biggest "up days" of the year.
Get a couple of those thrown in the mix here and it could happen, though my personal opinion is slightly more conservative as I think bitcoin will peak around $20k for the highs this year.
Stay informed my friends.
-Doc
Posted Using LeoFinance
Wow, that means even the current prices are at a discount, so to speak. Thank you for sharing! ☺️
In theory, yep.
Yes sir, bring on ATH above $20k this year and then beyond next year. Thanks for the charts and stats Doc.
I could see it. Bitcoin has a ton of wind in its sails right now.
Interesting!
Unfortunately I will need BTC to go up quite a bit before I start shopping for those. I would help things to get HIVE to a couple dollars tho. ;)
It's some pretty interesting data to consider. I remembered when Bitcoin, not long ago, was behaving more like a stablecoin in comparison to all the chaos going around. Time will tell if Bitcoin will explode that violently, but here's hoping we'll see some gains. We've unfortunately yet to conquer $12,000 :-p
Yea it's funny how that works that people are unwilling to buy now at $12k, but if we start really taking off, people will gladly jump in at $15k or $20k etc...
Lol, that's very true. Now is perhaps the best time to get in, before we start making our way to the moon. I'm taking a look into Chainlink (LINK) now, maybe wanting to add more of it into my portfolio. It almost broke $20, which is quite astounding after its 900% gain this year alone. I'm wondering if now is a good time to buy, or perhaps I should wait until a pullback... 🤔
So exactly what I've been saying since the start of COVID...
nice :D
Sure, though I do remember some of your monthly calls not working out so well, specifically at the beginning of this year so don't starting patting your back just yet. ;)
Yeah well assuming that the doubling curve would hold despite all the warning signs that pointed at the government absolutely failing to contain the pandemic... was foolish. I only assumed that because it had a 7 year history of doing so.
However, once we did lose an entire year's worth of gains, crashing to $4k, it became pretty obvious that the recovery would be swift and catapult us to new heights pretty quickly. I challenged every single analyst (on a weekly basis) that made claims that we would dip significantly during that time, and I was right. It was an easy bet to make.
Now we are set up in a position of massive momentum that will flip the pendulum around a few times before petering out.
Again, it's a much easier and safer bet to make. Ironically enough I have no emotional urge to buy more crypto at the moment. Seems like I've finally acquired enough to be satisfied. Still, it looks like we are approaching a once-in-a-decade opportunity.