Bitcoin Volatility Nears Record Low Levels Before June 7 Price Decline

According to Cointelegraph: Bitcoin's volatility has recently been hovering near historic lows, with the 15 days leading up to June 7 marking some of the lowest volatility levels in the cryptocurrency's history. Before the price drop on June 7, Bitcoin volatility was within the bottom 6% of all 15-day periods, according to Swan Bitcoin's Chief Investment Officer, Rapha Zagury.

Bitcoin Low Volatility Period:
- Historic Low Volatility: Bitcoin's price movement over the 15 days up to June 7 was so minimal that it approached historic lows. This period of low volatility was within the bottom 6% of occurrences in Bitcoin's history.
- Range-Bound Trading: During this time, Bitcoin traded within a narrow 7% range between $66,936 and $71,656.

Bitcoin Volatility Data:
- 15-Day Rolling Volatility: Zagury noted that the 15-day rolling volatility was at 23%, which is close to the lower level historically observed.
- Extended Stability: This period highlighted an extended duration of stability where Bitcoin's price was "stuck in a range."

Market Response

Bitcoin Price Decline on June 7:
- Sharp Decline: On June 7, Bitcoin's price dropped by 3.33% to $69,264, according to CoinMarketCap data.
- Trigger Event: The price decline coincided with the release of the U.S. Employment Situation Summary Report, which indicated stronger-than-expected job growth, signalling that the Federal Reserve may not cut inflation rates on June 11.

Previous Low Volatility Periods:
- Short-Term Returns: Zagury highlighted that following previous periods of similarly low volatility, Bitcoin's average return over the next 30 days stood at 20.95%. However, returns varied widely, with a minimum return decline of 32.06% and a maximum return of 218.40%.
- Long-Term Insights: Over a 365-day period following similar low volatility, the minimum return was 55.59%, while the average return was an impressive 820.82%.

Although these historical trends offer valuable insights, Zagury emphasized that they should not be seen as direct predictions for future performance but rather as a means to understand market dynamics. Given the recent low volatility, market participants may expect significant price movements as volatility begins to normalize. Upcoming economic indicators, such as inflation rates and Federal Reserve decisions, will likely play a crucial role in shaping Bitcoin's price trajectory.