Bitcoin's volatility is the lowest since the 1,5 year. Trade is dying?

Bitcoin bubble burst? You can certainly get this impression. There is practically no trace of the exchange rate volatility from a year ago. The current BTC / USD rate is $ 6500 and the average volatility is at its lowest in 15 months. The fluctuation amplitude from the beginning of August is "only" $ 1850. Compared to the Forex market, it is still a spectacular value, but on the other hand, Bitcoin is not used to it. Maybe it's time to change our perception of the most popular cryptocurrency and start treating it like an average financial instrument?

Bitcoin = krypto-EUR / USD?

Among cryptocurrencies, BTC is still a leader in terms of liquidity and recognition. In this respect, some analogies can be found with the EUR / USD. However, with its popularization, in particular on regulated markets (futures contracts listed by CBOE and CME), the spell of above-average volatility has passed - it seems that it is irretrievable.

The price from May moves shyly in the price channel, showing no desire to move into a long-term, spectacular trend. It is also interesting that the Bitcoin turnover in September was the lowest since April XUMUMX, when the market priced this instrument at around 2017-1100 $.

BTC / USD chart - May-October 2018

But the old adage among technical traders says: "The longer the consolidation, the stronger the breakout". Will this also be the case in this case? Not so long ago, there was no shortage of experts' opinions on the future BTC valuation. The shooting in forecasts was mighty - from 25 000 $ to even 50 000 $. And that's until the end of 2018. The chances of realizing such "crazy" scenarios in the present circumstances are almost negligible but possible. After all, history repeats itself, and a year ago, Bitcoin's rally from $ 6000 to $ 19000 took Bitcoin a month :-).

Rescue variability for BTC

If nothing unexpected happens, then there is a chance that we will have to accept the new, standardized nature of Bitcoin. This, however, will make trade, at least on European forex trading platforms, virtually unprofitable.

In connection with ESMA regulations, Forex brokers from the EU can offer retail customers the maximum leverage of 1: 2 on instruments based on cryptocurrencies. This means that the minimum transaction must be allocated at the moment to 3250 $ (about 12 000 PLN). Added to this is the spread, which oscillates at the limit of 100 $ for 1 BTC, or 1,5% of value.

For comparison, the average cost of spread and commission on EUR / USD is approx. 0,7 pips, or 0,0068%. And yet we get higher liquidity, greater leverage and recently similar volatility.

It is worth remembering that Bitcoin was not created with the intention of becoming a purely speculative instrument, despite the fact that we - traders - usually view it this way. However, it is the increase in interest from a wide audience that is what cryptocurrencies need for this market to continue to develop dynamically in the long term.