Bitcoin Forum

Hi,

I have a question as developer of the Bitcoin Seismograph (http://www.bitcoinseismograph.com). The tool has identified a high Bitcoin volatility (above 25% for 60 days) due to recent price rises!

So my question is, if you see that as a warning sign or just normal behavior of Bitcoin. At which volatility level would you be concerned?

The Bitcoin Seismograph is intended to support Bitcoin community to monitor the Bitcoin ecosystem and identify unexpected developments earlier. It needs your feedback for finetuning the analysis algorithms.

Thanks for your help,
Marcel

I am not sure, if I can agree to your second sentence  ;)

but, at which point would you be worried?

The Bitcoin's price is always volatile and that's a known fact about it since its creation almost. There is no new thing here, just you need to deal with it. But in the near future, the price will (most likely) keep rising for a while.

Hey,

thanks for your reply and interest. I agree, quite high volatility has been here and will be here, but from a personal standpoint I am a bit worried about the price rise as I do not understand the reason for that at the moment.

But back to the question: What would be indicators which would let your alarm bells ring?

Thanks for the help,
Marcel

Bitcoin, as well as other crypto currencies, doesn't depend on the local economy or some industry, like AUD or ZAR. The volatility cannot be easily predicted and you cannot build your forecast on the well-known factors.
There is the general expectation that BTC will reach $25,000-50,000 in 2020-2022, but it is the estimated forecast without any exact evidence.

I agree, this has been an ongoing debate for so long. Bitcoin's price had been volatile ever since so I don't know why people keep on asking about its volatility.

Well, I have a lot of discussions with non-Bitcoin users (i.e. my PhD supervisor or research partners) and volatility is the number they look at (next to the price).

The volatility is part of Bitcoin's history on free market.
People seem to not care of volatility while the price increases, whether slowly or very quick. Same people may be quite concerned if the price decreases, especially if the happens over long periods of time.
It may look strange, but much more than other assets, people really expect from Bitcoin to reach very high valuation.
At least this is my guess.

So, if volatility does not tell the story, is it transaction numbers or pool sizes (or network numbers in general) then?

The high volatility in Bitcoin is caused by the uneven distribution of the coins in the early days. This give certain individuals

{Whales} or even a group of them, the ability to manipulate the currency/commodity. They time their dumps and pumping

to the tee to maximize their profits. This will continue, until more people buy bitcoins and the spread of coins are more

equally distributed.  ;)

no. but for now I will keep all my bitcoins. and expect no transaction using bitcoin abruptly. for now we better hold our bitcoin and wait for the right time with a more stable price and more conducive situation.

But how to determine when you reach some sort of a equilibrium?

Volatility can be a great concern for any other assets most especially the fiat money but as for Bitcoin it is not alarming at all...since volatility has been a permanent feature of this cryptocurrency for a long time now. Volatility can work both ways...and it can drive fear to someone and can be a magnet for another one...depending on how we understand it in light with Bitcoin.

We have already accepted that volatility is becoming like the twin brother of Bitcoin. Now, the question is: Is there a correlation between volatility and the potential for Bitcoin to pop like a bubble? Or volatility is what makes Bitcoin really attractive to many Bitcoin enthusiasts?

I think that many people will be happy when the bitcoin price increases, so it will benefit them. But the fluctuations are quite unusual, causing many to argue about it. The bitcoin price suddenly rose too high and they were afraid it would collapse at any time...

Noting is strange here. Bitcoin is created to be volatile. It depends only on law of supply and demand.
More people wants to buy bitcoin more bitcoin is higher.

Volatility of bitcoin has been an issue ever since I have known it (2015) and I think it will still be even after a few more years. I stopped worrying about it and took it as an opportunity. It will be like this for a few more years so better be used to it. I hope it gets more stable but I do not mind the volatility anymore.

Yes I'm certainly worried about high Bitcoin price, several factors that pump Bitcoin price is due to North Korea launching missiles to Japan. I'm worried that if Bitcoin bubble burst then a lot of people would get hurt financially, get into debt, 0 life savings and etc.

Even I am thinking the same. Bitcoin's price has been increasing high enough for past few months and it would be better to hold the coins and sell it at a better price later.
Its huge increase in price also gives me goosebumps as it is an indication of a fall in price soon. The more increase in price, the more chances for it to fall a little.
But i strongly feel that it won't go fall any sooner. Its price is to cross $5000 which will make a huge impact on the society. There are chances that more people buy it once they get to know about it.

I agree, it definitely causes media attention, but the higher the price gets, the fewer people (or newbies) will think, now might be a good time to invest... Or am I wrong?

What's new with volatility of Bitcoin? It's always been same. We have seen 50% drop many a time. 25% is still less. There is cut off period in July because of potential fork, buying activity decreased sharply and in August the same buying activity increased sharply as all the investors were waiting for August. Thus, volatility was inevitable. It was quite natural.

So I would rather say nice try to advertise your site.

It's a normal thing for bitcoin traders, in fact, am happy that the price is rising. I'm gonna sell 2-3 bitcoins when it hits $5k. I think we'll see a correction soon as I guess lots of holders waiting for $5k mark.

It's not, but I'm worried that it has not fallen and continues to increase. Because we are more difficult to buy bitcoins. If that happens, it's likely that a satoshi is harder to earn. But it's still too late to buy bitcoins because I'm sure that this is a good replacement in the future.
And if that's happened. We will become a millionaire

Actually, I do not understand your post. But btc price fluctuations in the current do not make me feel very anxious. It is like the inherent transformations of the market. that's all.

Obviously, bitcoin is volatile because of fluctuating supply and demand. Being limited in supply and increased demand, price rises. If more people are selling BTC than buying, price goes down. Speculation + supply/demand = volatility.

Bitcoin has always been volatile and will be, from $1 to $4800, any alarm bells ringing? Numerous times it had been said that bitcoin is a bubble and would burst soon, equal number of bullish predictions have been made, governments legalising bitcoin, institutional investors getting into bitcoin, mainstream adoption. Where to find the indicators in all these ;D

There has been no other currency that has shown an exponential growth like bitcoin and this triggers the bubble warning, but the fact is there hasn't been something like bitcoin before in the history of money so it would be difficult to find indicators which would accurately predict how bitcoin volatility will play out.

Well, I totally agree that volatility is nothing new in Bitcoin, what I do not get is the level when it will raise concerns. Or how to find the information like you gave in your post, explaining the situation and putting high volatility numbers into context.

The Bitcoin Seismograph is intended to provide the context for the numbers (by displaying ongoing top reddit and bitcointalk discussions), but I need some feedback at which constellations of Bitcoin indicators you need to have a deeper look into the context.

Therefore, I am quite thankful for the discussion today despite the little advertising effect for http://www.bitcoinseismograph.com (http://www.bitcoinseismograph.com)  ;)

All the best,
Marcel

i dont worry about that, as long as bitcoin is still a favorite and many people buy it in market exchange. even though the price is very expensive we must still believe that bitcoin prices will skyrocket again. look at the chart months by months or even yearly.

I am not worried because bitcoin nature is highly volatile, it is because of the speculative market.  If we observe the market it is not just now that the bitcoin price is highly volatile, it was been acting like that ever since.  So I guess instead of worrying, try to figure out how to take advantage of the price fluctuation.

I'm not too worried about the high volatility. You get used to it, if that makes sense. The market is still very young so this is quite normal. As money keeps flowing in the market should automatically stabilize itself.

Bitcoin has always been very volatile so this is nothing now. It is still new technology and will be unstable for a while. The good news is that overall, the price moves upward which is a sign that there is demand for it.

I think that the current high price is a good sign even if it's somewhat inflated right now. A correction could still leave the price over $3000 at this point.

It seems to me that the high volatility of the Crypto-currency, that is, the sharp jumps in its rate up and down, is not a drawback, but, on the contrary, the dignity of the crypto currency. With its high volatility, there is no stagnation or boredom. It is especially good at this to trade on stock exchanges. In addition, it is necessary to take into account that the general tendency of the Crypto-currency is the constant growth of their price, which significantly increases interest to it.

Worried is probably too much of a word, but I can't deny I'm concerned. The rise we're seeing is too fast, and without reasons. We still have the damned 1MB block size limit. Fees are high and transactions are slow. I know changes are coming, but we're still waiting for them. I wouldn't be surprised of a sharp drop.

I won't deny that a drop might happen in future. But I don't think reason would be high fees or slow transactions because regardless of high fees and slow transactions during August, price almost got double. I don't think majority of investors are worried about fees as most of the investors mainly hold Bitcoin and refrain from everyday transactions. They are more concerned about growing their money through Bitcoin. Moreover, recently due to Segwit implementation there is a slight decrease in fees.

Well, I see your point that high volatility means no stagnation or boredom, but from a new user perspective, would a high price and high volatility decrease interest as my initial investment is aligned with high risk?

Not exactly, if someone monitors and keeps an eye on the present and previous values of bitcoin, it should be identified earlier and anything worried will be solved on. The prices of bitcoin will grow more and more because of the people interest and trust. So I think there is nothing to worry about the high bitcoin prices volatility at the moment. We all have to wait for the coming situation.

Of course, a high volatility precludes transactions, but speaking as a Trader I think it's great hahahaha! ;D ;D ;D

Volatility exist on any market but I think the question of the op is a valid one, bitcoin has been very volatile in the last weeks and months, at least more than usual, however I think this is just a sign of the important decisions that were taken in the last weeks with the activation of segwit and the bitcoin cash fork.

Many traders have their own style, and of course the majority of old traders will be happy with the current volumes, if perspectives are always high and rarely experience a decline then market conditions will automatically go down due to the level of boredom and small profits. Current volatility/fluctuations are very interesting.

I have been here since 2013. I saw Bitcoin go all the way up to $1200 and then all the way down to $150. Needless to say that anything that im seeing now feels like a walk in the park, nothing faces me, im just relaxing and watching my wealth go up as we discover new floors. Meanwhile newbies are panicking everytime to price moves 100 bucks up and down, really amusing to be.

Seasoned Bitcoin holders are still celebrating from such an unstoppable success. Can't wait to hit $10000 next year to see how all the idiots that panic sold during this dip will whine like.

yes, the bitcoin price is fluctuating, why should worry and should be questioned ,, in fact we are all happy if bitcoin prices rise, we can sell our bitcoin, on the contrary, if bitcoin price down we can buy it ,, what we are looking for from bitcoin is a profit.

At this point I have found it easyer to just hold and care less about the price. The price is so volatile as is that It does me no good too worry if it will crash in the future. So far each and every time it has come back even stronger.

i for one am not worried with the volatility of the movement, since it is the same volatility that made it what it is today, so no need to worry. I think when asking this question a lot of us here are wondering how come there are some who will say they are o worried about the movement of bitcoin and others just take it easy, we need to understand types of investors, since we are all involved in bitcoins. the first one is the conservative type, you want your money to gain but you don't want to lose a lot, for this type of investors, if you also invest in bitcoin, you will easily sell your bitcoins since there is a high return and also a very low depreciation in time. then there are those who can take both highs and lows but know when to exit, those are considered moderately aggressive since they are studying the market, and want a win-win situation or a stale mate, when they feel their investment is going down. then we have the aggressive ones, that's where most of us belongs, we want to get the highest gains though there is also a high risk of losing, but when it comes to bitcoin it is a different story. i think we should first check what type are we, before we even engage in investing so we we know our tolerance.

I am not worrying about high bitcoin volatility instead I am enjoying because it's happening in a positive side so bitcoin price keep on increasing . If it is in a negative side I could have think about that .

Actually here all the fluctuations in the graph we are seeing are based upon the simple rule of guessing of the down and up in price .
So we don't need to worry much about this thing because no one graph can tell us Exactly what will happen in the future wity bitcoin or with any cryptocurrency because it depends upon the demand and discussion in the market .
Here in the past i seen that no one prediction goes well accurately because market can fluctuate anytime .
And also a big factor that i seen during the brexit ( bretain + exit ) the price of the bitcoin get pumped to up , that was totally unpredictable by everyone , so anytime anything can happen and we should always ready for any type of pump and dump .

I think if you are an active bitcointalk user and reader, then getting these numbers and context won't be difficult. Lots of discussion regarding these things goes on here. I visited your website and yeah having all the info at one place is aways a benefit. Moreover, your site's look is clean which makes it better to read.

No, I must use it to gain profit on trading.

Bitcoin volatility is just normal it fluctuates daily. Yes I'm not worried though so most traders are happy with the bitcoin value because they can earn huge profit on this. Moreover, we cant verify at what price it fluctuates but most are hodling as the price may increase.

High volatility is inherent not only bitokoyu, but also all other crypto-currencies. This is absolutely normal and should not be feared. After a recent sharp increase in the rate, bitcoin needs to be adjusted and therefore a temporary decrease is its normal behavior.

Correct people that are new to bitcoin get worried about small crashes, but back in the day bitcoin crashed 85% or more in a very short time frame, that will be the equivalent of bitcoin crashing to 600 to 450 dollars today so unless we see a crash that big I’m not worried.