Reduced Bitcoin Futures Volatility Offers a Glimpse of Hope to Long-term Speculators
The Bitcoin market appears poised to rebound fairly soon. Some small uptrends have begun forming over the weekend and first half of the week. This also has an effect on the volatility associated with Bitcoin futures. This is a positive sign that might hint at future price growth.
Bitcoin Futures Volatility Decreases
The general interest in Bitcoin futures contracts is not where it should be. All providers have noted very small volume since introducing these vehicles month ago. As an added “bonus” of sorts, the volatility of futures has been on the decline. This trend has become apparent for several months now. As the price of Bitcoin declined, so did the volatility for these new trading products.
In the week ending on October 26th, Bitcoin futures were the least volatile since being introduced. That marks an important milestone for the cryptocurrency ecosystem. More stability can easily lead to future price increases. So far, it seems the value per BTC is on the rise, albeit ever so slightly. For anyone still on the fence about Bitcoin, the coming weeks may very well be crucial.
Compared to traditional markets, Bitcoin’s momentum is almost subdued. All traditional assets suffer from increasing volatility in the past few weeks. This discrepancy between both industries paves the way for reverse market momentum. Bitcoin appears to be decoupling itself from other assets in this department. That is not necessarily meaningful, but still intriguing.
The Road Ahead for Crypto Futures
This unexpected dip in volatility comes at an intriguing time. Bakkt is bound to launch its physically-settled Bitcoin futures in the near future. As such, the decrease in market swings can make those products more appealing. At the same time, speculators are drawn to cryptocurrencies because of their price swings. A lack of momentum can easily have an adverse effect on investors.
One can look at the futures volatility decline as a sign of maturity. Bitcoin celebrated its 10th birthday and is seemingly entering its next stage of development. Combined with upcoming technical improvements, the world’s leading cryptocurrency continues to dominate the market. Even if the Bitcoin Dominance Index is dropping slightly, Bitcoin still remains the “top dog” for the foreseeable future.
Across the crypto industry, prices appear to be on the rise. One notable exception is Bitcoin, which cannot sustain an uptrend for very long at this time. That is also a side effect of the declining volatility in general. With this momentum in place, the final months of 2018 may result in some positivity overall. Cryptocurrencies have struggled throughout 2018, yet it appears that struggle is slowly coming to an end.
Do you think that Bitcoin’s current lack of volatility bodes well for the long term? Let us know in the comments below.
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