Bear market signal? Bitcoin's 30-day volatility hit a two-and-a-half-year high, and the number of large transfers plummeted

The 30-day historical volatility of Bitcoin exceeded 100% for the first time, close to the historical peak at the end of 2017.

For Bitcoin, the mad cow has been in the past few months, rising from a low of $3,400 to a high of $13,800, easily breaking through several strong resistance levels. But recently Bitcoin has started a big correction, and the volatility is at its highest level in history. At the same time, the number of large transfers in the Bitcoin chain for nearly 30 days has dropped significantly. Are these signals for a bear market?

According to a recent study by the SFOX research team, bitcoin volatility rose from 89.33% on July 10 to 100.30% on July 17. This is the first time since March 6, 2018 that the historical volatility of Bitcoin's 30-day history has exceeded 100%.

Backtracking history, the 30-day volatility of Bitcoin broke through 100% three times, occurring at the beginning of 2015, the end of 2015, and the end of 2017. Within 30 days after the volatility peaked, the highest price of Bitcoin fell 7%, 5%, and 27 respectively. %. Among them, the peak value of the 30-day volatility of Bitcoin (138.26%) appeared on December 30, 2017. After that, Bitcoin quickly entered the winter in 2018, with an annual decline of more than 70%.

In the past four months, Bitcoin has broken through $10,000, $11,000, $12,000, and $13,000 from a low of $3,400. It hit a new high of $13,800 and reopened a new wave of bull markets. And the arrival of this bull market seems to be earlier than planned. Bitcoin began a sharp correction after hitting a pressure of $14,000. The current price is around $9,700.

According to Mayer Multiple, Bitcoin is experiencing the most volatile phase of development history, and the current callback volatility is very similar to the first “major correction” before the 2017 bull market. As of 11 am on the 26th, Meyer's multiple was 1.55, 12% higher than the historical average of 1.39.

According to market research firm Skew Markets on the 18th, since the end of the big bull market in 2017, the volatility of Bitcoin has returned to an unprecedented level.

According to the blockchain media NewsBTC analysis, overall, it is currently experiencing the most unstable period in the history of bitcoin development, and this has only happened twice, one is the big bear market in the second half of 2018, and the other is The big bull market at the end of 2017. Looking back at the development history of Bitcoin, we will find that every time before the big bull market, there will be a bear market. Even before the big bull market in 2017, I experienced a long six-week “Little Bear Market”.

With the recent high volatility of Bitcoin, the relationship between cryptocurrencies has also changed. The SFOX research team pointed out that the market value of Bitcoin has increased significantly from 50% in March to the current 65% to 75%. In addition, the correlation between many mainstream cryptocurrencies and bitcoin is also lower than that of previous months, after they were highly correlated with each other. Shallot found that the correlation between ETH and Bitcoin fell from 0.93 in May to 0.86 in July, LTC fell from 0.96 in May to 0.74 in July, and ETC fell from 0.88 in May to 0.77 in July.

It is worth mentioning that bitcoin prices began to adjust after reaching nearly $14,000 on June 27. There is a clear correlation between currency price fluctuations and the number of transfers on the chain. In the past 30 days, the number of large transfers on the bitcoin chain has dropped significantly. According to Tokenview data, since the number of bitcoins in a single day on June 27 reached the highest of 2,398 in the past six months, the indicator of bitcoin has been declining in the past month. The number of large transactions in the past 24 hours is only 58. .

What please let Bitcoin fluctuate and callback?

Since the beginning of this year , the US capital market has continued to fluctuate under the impact of multiple factors such as the escalation of trade disputes and the expected slowdown in economic growth. Bitcoin has shown the characteristics of safe-haven assets and attracted many investors' attention. So what happened in the past month to make Bitcoin volatility and callbacks happen?

Since the birth of Libra in mid-June , countries around the world have become more and more important in the regulation of cryptocurrencies. On July 24 , US Finance Minister Mnuchin publicly stated that financial regulators continue to focus on all cryptocurrency assets and may introduce more regulations to ensure the security of the US financial system. On July 16-17, David Marcus, the father of Libra, was bombarded by members of Congress in Washington for two consecutive days. The regulatory words were frequently searched.

Last week , the G7 central bank governor and finance ministers meeting was held on the outskirts of Paris. During the two-day meeting, participants issued a series of warnings to Libra that it was not conducive to the development of the global economy. In the statement after the meeting, the G7 central bank governor and the finance minister agreed that Libra may affect the monetary sovereignty and the operation of the international monetary system, which will lead to serious regulatory and systemic concerns, as well as broader policy conflicts. All need to be resolved before Libra goes online.

Last week , US President Trump announced in a "three-pronged" way that he is not a fan of Bitcoin and any cryptocurrency. Facebook's Libra will have almost no reliability. Facebook must seek a banking license for virtual currency. . In a word, the gray area where the cryptocurrency is located must be strongly supervised.

Although bitcoin prices have been under a long-term downward pressure after hitting $13,800 this year, there are still studies showing that a large-scale uptrend is about to happen. According to a report released today by Grayscale Investments, more than one-third (36%) of US investors will consider investing in Bitcoin, which represents a potential market with more than 21 million investors.

In addition, as of 8:00 today, in the OKEx Bitcoin contract elite account, the long-term position of the Bitcoin contract still exceeds the short position: the average long position ratio of the long position is 24.20%, and the average short position ratio is 17.52%. The current total number of BTC contract positions is approximately 53,900 BTC, and the positions increased compared with yesterday.

Author: Hu Chen, please indicate the source

Source: Shallot blockchain