Bitcoin volatility index falls to 15-month low

by in Cryptocurrency News

Volatility

Bitcoin (BTC) has been trading in a tight range over the past few weeks. On Thursday, February 3, the cryptocurrency rose in price to $37,043. The capitalization of bitcoin is approaching $700 billion.

A report from Arcane Research says that the BTC volatility index is at its lowest level since November 2020.

Bitcoin’s swing range has been sharply reduced after the coin fell below $40,000. It found a bottom around $33,500 and then managed to partially bounce back, although the pressure is still very strong.

Volatility will escalate if the cryptocurrency approaches the nearest resistance level or rolls back to the support zone.

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On a weekly basis, the volatility index fell to a 15-month low in February, and analysts believe that the range of BTC price fluctuations will remain small in the coming days.

Turbulence will return to the market if bitcoin tries to break through the resistance around $40,000.

The Arcane Research report notes: "The $40,000 mark is a key resistance level. Given the slow rise in BTC recently, we will see how the cryptocurrency will test this resistance level soon. A breakout would be a relief for the bulls and could signal a trend reversal."

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The company also pointed to the risks for bitcoin in the medium term.

According to analysts, if the coin starts to retreat again and falls to $29,000, then a new round of turbulence could provoke panic in the market with disastrous results for BTC.