Bitcoin volatility could return to ‘catch up’ with gold in 2023

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Bitcoin (BTC) volatility is declining as expected, but BTC price action could still catch up to gold this year.

The latest data and analysis shows that despite bitcoin’s sideways movements, the largest cryptocurrency is performing as expected.

BTC Price Volatility Follows Bear Market Pattern

With traders frustrated by a lack of tangible movement in BTC/USD, volatility is under the microscope at the start of 2023.

For analytics resource Ecoinometrics, however, there’s nothing to worry about Bitcoin becoming more stable over time, and that’s a feature, not a bug.

In the January 2 Twitter comments, he said that so far the pattern of less extreme volatile events as Bitcoin matures is confirmed.

An accompanying chart of Bitcoin’s one-month average realized volatility distribution came with a description of BTC being deep in a bear market.

The data showed volatility declining at identical points with each four-year halving cycle, making 2022 firmly in line with the trend for volatility to decline further with each bear market year.

Distribution table of Bitcoin’s one-month average realized volatility. Source: Ecoinometrics/Twitter

The ecoinometric nonetheless noted that volatility is not yet at record highs, unlike data from more recent sources such as the Bitcoin Historical Volatility Index (BVOL).

Bitcoin Historical Volatility Index (BVOL) 1 week candle chart. Source: TradingViewBitcoin Ready to Track Stocks, Gold, Traders Jump

In terms of triggers that could upset the volatility status quo, investors may not need to look far.

Related:The United States will see a new inflation spike 5 things to know about Bitcoin this week

In addition to the return of TradFi volume on January 3, analysts are eyeing a potential cat-and-mouse game between BTC/USD and gold.

2023 will be one of the best yet for precious metals, will Bitcoin play catch up? popular Twitter account Tedtalksmacro polled this week.

Comparing the two assets shows that the impact of November’s collapse in FTX persists for Bitcoin, while gold has seen a comparative revival. Until then, the two were in sync, data from Cointelegraph Markets Pro and TradingViewshows.

BTC/USD against XAU/USD 1-day candle chart. Source: Trading View

Stocks may also provide a quicker boost to BTC price performance, with US futures tending to rise ahead of the first Wall Street session of the year, copying the 1-2% gains in Europe over compared to the day before.

Bitcoin looks ready to go, but still hard to call when the US opens tomorrow, Michal van de Poppe, founder and CEO of trading firm Eight, predicted at the time.

I would chase the $16.6000 area if you are not in position. Targets; Annotated chart $17-17.1K.BTC/USD. Source: Michal van de Poppe/Twitter

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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