Volatility and its effect

[Woodie]

In the foreign currency market, I recently experienced the BTC/USD volatility effect, which prompted me to investigate what makes the pair (bitcoin) so volatile.

I see bitcoin is paired with a major currency which happens to be the dollar...is it possible you experienced the volatility during NFP (non-farm payrolls report) ??

Factors that create bitcoin volatility.
1. Demand and Supply
2. Investors' and user sentiment
3. Government regulation
4. Media blitz

I think these pointers given here pretty much sum up what influences how our crypto markets behave...

Though external factors  such as Politics, Environmental impact, technology etc have proven to influence the volatility of bitcoin as not everything needs to be directly related to cryptocurrencies.

[Nrcewker]

As per my understanding, Volatility goes mental when there is a Bitcoin news spreading around like a forest fire, that time is the best time to take a trade as more the volatility, better the returns. In Bitcoin, it can happen for some reasons however the main/primary reason is the rumors or the news related to it. Other cryptocurrencies do affect the price of Bitcoin like ETH, BNB etc. All of those are co-related to each other.

Well said. When the market is volatile, the returns are better. But many newbies forget that along with better returns, high risks also comes. So if you are someone who is new into this field and gets attracted towards Bitcoins or market by seeing the volatility, then let me tell you that, before jumping in, do proper analysis, research and risk management.
The price of Bitcoin really affects by the news and the masses. The news or the rumours make the investors crazy and they do quick unwanted decisions. This fluctuates the price all the time.

[Odusko]

In a simple understanding, the main reason of the volatility is the relation between Circulating Supply and Market Capitalization. It also depends on the number of holders of a currency. If we compare Bitcoin to other cryptocurrencies, Bitcoin has less volatility. It's simply because the market cap is so big and it's number 1 cryptocurrency base on the market cap. This is one of the reason why Bitcoin is the safest cryptocurrency to invest with. Time will come that Bitcoin will be more less volatile where the establishments really accept Bitcoin as payments.

Bitcoin is becoming more stable lately and that is all due to fewer activities in its market, not in the like of daily trading volume but price negotiation and settlement, Bitcoin has settled within a price range doing a cycle of up to 3-4 months which is long enough to declare Bitcoin stable because compared to other coins whose market volatility are high and prices are changing frequenting either in an uptrend price movement or downtrend.
The same can not be said for Bitcoin and that is because of Bitcoin's value and scarcity coupled with Bitcoin's independent decentralized network that disallowed control of the market.

[el kaka22]

It's going to be obviously a difficult thing to handle when you are not used to it, but it is not really unheard of neither. You should be able to do it if you can and it shouldn't really be a problem in the end neither. We are talking about something that will take a while but it is not something that will make it near impossible for you to make a profit from neither.

I believe that if you could end up with a good result from some of the volatility then you are going to start enjoy it. The problem with it is just the first time you see it, and when you see it for the first time you are going to be scared by seeing it and the way it moves and you will need some time to adjust your brain to this much movement this quickly.

[OgNasty]

Volatility doesn’t matter so much if you have a long time frame and aren’t worried about day to day movements. The news agencies, exchanges, traders, all benefit from volatility. They want you hanging on every piece of news and trading every event to create volatility. News outlets benefit from advertising, exchanges benefit from trading fees, traders get more opportunities, and the suckers that fund it all are traders seeking a quick buck.

[goaldigger]

Yes. OP is right. This is very influential, especially for Users and their trading physiology, where the factors that the OP mentioned above contribute to the volatility of market prices, especially BTC.

This happens very often. If we pay attention to market performance, when the price moves down more and more drastically (correction) it will cause high selling and if it continues it will cause panic, fear of other bitcoin owners so that more and more parties don't want to lose. well, what in their minds would have taken similar action to immediately sell their bitcoins. As a result, the price of BTC can be corrected and continue to fall.

Dealing with the volatility is a big challenge for every trader emotionally because it can ruin their strategy so as a trader you should be able to adjust accordingly and always have your selling price and the cut loss price with this, you can deal with that volatility professionally and you'll not be affected by this emotionally. If you're into long term trade then I think volatility is your least concern since you believe for the future price and you're confident about that project and you choose to hold long term.

[Aanuoluwatofunmi]

Bitcoin is known for being a volatile cryptocurrency and that's how it will always be, we should forget about the cases of instances whereby we experience dip and bull in bitcoin market and we often say much on the bear than when we have the bull, have we even consider it that it was during the bear market that we have fear of missing out to be very common, even some people holding will try to sell if think otherwise, but bitcoin has always been this volatile base on it demand and corresponding supply and the two will always have effect on the market.

[Falconer]

Bitcoin is known for being a volatile cryptocurrency and that's how it will always be, we should forget about the cases of instances whereby we experience dip and bull in bitcoin market and we often say much on the bear than when we have the bull, have we even consider it that it was during the bear market that we have fear of missing out to be very common, even some people holding will try to sell if think otherwise, but bitcoin has always been this volatile base on it demand and corresponding supply and the two will always have effect on the market.

Volatility is inseparable, it will surely be there forever for bitcoin trading. That is why everyone is warned about the risks of trading and investing, this is meant to let them understand that volatility can be both detrimental and profitable. Traders and investors must properly understand price volatility in order for them to benefit from it. After all, volatility is needed by traders in order to take advantage of the market.

[maydna]

Bitcoin is known for being a volatile cryptocurrency and that's how it will always be, we should forget about the cases of instances whereby we experience dip and bull in bitcoin market and we often say much on the bear than when we have the bull, have we even consider it that it was during the bear market that we have fear of missing out to be very common, even some people holding will try to sell if think otherwise, but bitcoin has always been this volatile base on it demand and corresponding supply and the two will always have effect on the market.

Bitcoin has had its volatility for a long time, so it's not surprising that the price goes up and down a lot, and even when the price falls, we wouldn't expect it to hit a lower price. We often talk more about bears because we want to know how deep the price analysis people are doing so we can be prepared to buy at that low price.

You don't need to worry about the price if you are used to volatility. You just need to know when to place a purchase order and leave it until it is filled. Don't worry if the price drops again, maybe even down to a few percent, because that is a bonus for you to buy bitcoin at a low price.

[taufik123]

Volatility is inseparable, it will surely be there forever for bitcoin trading. That is why everyone is warned about the risks of trading and investing, this is meant to let them understand that volatility can be both detrimental and profitable. Traders and investors must properly understand price volatility in order for them to benefit from it. After all, volatility is needed by traders in order to take advantage of the market.

Broadly speaking, high volatility is a characteristic of Bitcoin, and with this volatility,
the price will fluctuate which can be utilized to generate profits from each price movement.

High-Risk High-Return, of course, is the tagline that is always attached to crypto.
It will be very fast to get profits, but also faster to experience losses.

Everyone who enters crypto must be aware of this high volatility because it will be a self-borne risk.

[uchegod-21]

Averagely, Bitcoin volatility ranges between 1.68%_4.54%, where Wednesday is the most volatile day compare to other days and Saturday which is the least volatile days.

How was this data gotten, is it proven or verified or it is the opinion of one trader/written. I can agree that bitcoin volatility averages in the range of 1.68% - 4.54%. It is understandable and believable. But Wednesday and Saturday being the most and least volatile days respectively, I have no idea of that claim.
The volatility of bitcoin is an advantage and also disadvantage to the industry and as well as bit holders. I can say it is only an advantage without disadvantage to day traders because coins must be making significant moves for day traders to profit.

[fuguebtc]

Volatility is inseparable, it will surely be there forever for bitcoin trading. That is why everyone is warned about the risks of trading and investing, this is meant to let them understand that volatility can be both detrimental and profitable. Traders and investors must properly understand price volatility in order for them to benefit from it. After all, volatility is needed by traders in order to take advantage of the market.

Broadly speaking, high volatility is a characteristic of Bitcoin, and with this volatility,
the price will fluctuate which can be utilized to generate profits from each price movement.

High-Risk High-Return, of course, is the tagline that is always attached to crypto.
It will be very fast to get profits, but also faster to experience losses.

Everyone who enters crypto must be aware of this high volatility because it will be a self-borne risk.

Honestly, one of the reasons we invest in bitcoin and crypto is because of its volatility. Due to volatility, we can make higher profits than other markets, so high volatility is a good feature, IMO. But volatility is also a factor that keeps bitcoin from becoming a currency, but for investors, that's what they care about.
I always wonder, if bitcoin becomes stable and not so volatile, will people still use it for other use cases or will they find another asset to replace it?

[darewaller]

It is good to learn if Wednesday is the most volatile and Saturday is the least. I bet that it has something to do with the fact that we are back at work and just underway already for a while so we look at other things, on Mondays and a bit on Tuesdays we are handling that weeks new stuff, and on Wednesday we do not have that much job but still at work so we trade a lot, and on Saturdays we are out, it's the weekend and we are going out so we do not trade and instead just go have some fun.

This is why it's quite important to do something that will benefit us the most. I believe that it can be done a lot better and we should be considering it a lot bigger and better in the end. I get that it's not that great but it can be done.

[fzkto]

Bitcoin is known for being a volatile cryptocurrency and that's how it will always be, we should forget about the cases of instances whereby we experience dip and bull in bitcoin market and we often say much on the bear than when we have the bull, have we even consider it that it was during the bear market that we have fear of missing out to be very common, even some people holding will try to sell if think otherwise, but bitcoin has always been this volatile base on it demand and corresponding supply and the two will always have effect on the market.

Volatility is inseparable, it will surely be there forever for bitcoin trading. That is why everyone is warned about the risks of trading and investing, this is meant to let them understand that volatility can be both detrimental and profitable. Traders and investors must properly understand price volatility in order for them to benefit from it. After all, volatility is needed by traders in order to take advantage of the market.

It's fair to say that bitcoin doesn't have strong volatility this year. This suggests that bitcoin has had a sideways movement over the past few months. In such a case, it becomes difficult for traders to make successful trades if it is not within the trading day. Volatility will have to return when the real uptrend starts.

[taufik123]

-snip-
I always wonder, if bitcoin becomes stable and not so volatile, will people still use it for other use cases or will they find another asset to replace it?

If that does happen, then Bitcoin will be slowly forgotten.
The uniqueness of bitcoin from other digital currencies is due to its high volatility which results in price fluctuations.

Bitcoin is not like stablecoins or like gold, Bitcoin has its own characteristics and that is the attraction.
In addition, Bitcoin is truly decentralized, still using the POW network and not moving like most Altcoins that move to the PoS network, where PoS is semi-centralized.

Bitcoin is truly unique and nothing has surpassed Bitcoin as the most decentralized digital currency today.

[ajiz138]

How was this data gotten, is it proven or verified or it is the opinion of one trader/written. I can agree that bitcoin volatility averages in the range of 1.68% - 4.54%. It is understandable and believable. But Wednesday and Saturday being the most and least volatile days respectively, I have no idea of that claim.

None of OP's valid data includes the source of where the data is pointing to, so I think it's just his assumption.
I don't think so where there are certain days that get unstable prices? Is it more on weekends?

The volatility of bitcoin is an advantage and also disadvantage to the industry and as well as bit holders. I can say it is only an advantage without disadvantage to day traders because coins must be making significant moves for day traders to profit.

Volatility is inseparable from trading or any type of investment in cryptocurrency, traders will find it more enjoyable to see the price move significantly this makes a slight change where they are profitable.
Investors only need patience in terms of holding their bitcoin, nothing more than that except traders who are always alert when there is a significant change.

[MFahad]

As per my understanding, Volatility goes mental when there is a Bitcoin news spreading around like a forest fire, that time is the best time to take a trade as more the volatility, better the returns. In Bitcoin, it can happen for some reasons however the main/primary reason is the rumors or the news related to it. Other cryptocurrencies do affect the price of Bitcoin like ETH, BNB etc. All of those are co-related to each other.

Yes exactly news have a greater role in the volatility so successful will be those who take benefit from volatility and not get feared with decreasing price. Both bullish and bearish season are to take the advantage because both have its own role in crypto world.

When due to some news bitcoin fluctuates then at the same time other crypto coins also follows the same trend which suggests that all crypto coins have relation with that of bitcoin therefore bitcoin is getting trust of everyone.

News are not true all the time but effects the industry of cryptocurrency all the time, bad news moves the price negatively while good news moves it positively.

[Hamphser]

As per my understanding, Volatility goes mental when there is a Bitcoin news spreading around like a forest fire, that time is the best time to take a trade as more the volatility, better the returns. In Bitcoin, it can happen for some reasons however the main/primary reason is the rumors or the news related to it. Other cryptocurrencies do affect the price of Bitcoin like ETH, BNB etc. All of those are co-related to each other.

Yes exactly news have a greater role in the volatility so successful will be those who take benefit from volatility and not get feared with decreasing price. Both bullish and bearish season are to take the advantage because both have its own role in crypto world.

When due to some news bitcoin fluctuates then at the same time other crypto coins also follows the same trend which suggests that all crypto coins have relation with that of bitcoin therefore bitcoin is getting trust of everyone.

News are not true all the time but effects the industry of cryptocurrency all the time, bad news moves the price negatively while good news moves it positively.

Wayback into those previous years on which fundamentals or traditional economic situations or statuses wont really be that affecting crypto space or simply its really that independent and doesnt really make out some

significant effects into its price but now we are moving in an era or years on which it is really that becoming more significant because whenever there are economic kind of news or happenings which this market is really that having that particular movement whether it would really be negative or positive on which we can really be able to tell that it is really now on making some effects on the time these news or fundamentals would come out.This is why it would really be that so hard on trying out to neglect or dont pay attention when it comes to fundamentals.

This is why on the time that you do set your foot into this market then it would really be just that right that you should be having that in preparation in between fundamentals and technical
which you could really be eventually be able to have both things for you to be able to handle out yourself on this unpredictable market.

[Ziskinberg]

As per my understanding, Volatility goes mental when there is a Bitcoin news spreading around like a forest fire, that time is the best time to take a trade as more the volatility, better the returns. In Bitcoin, it can happen for some reasons however the main/primary reason is the rumors or the news related to it. Other cryptocurrencies do affect the price of Bitcoin like ETH, BNB etc. All of those are co-related to each other.

Yes exactly news have a greater role in the volatility so successful will be those who take benefit from volatility and not get feared with decreasing price. Both bullish and bearish season are to take the advantage because both have its own role in crypto world.

When due to some news bitcoin fluctuates then at the same time other crypto coins also follows the same trend which suggests that all crypto coins have relation with that of bitcoin therefore bitcoin is getting trust of everyone.

News are not true all the time but effects the industry of cryptocurrency all the time, bad news moves the price negatively while good news moves it positively.

People have been too reliant on the news and easily believe it without any verification if whether is true or false. This is a big factor that affects the volatility of Bitcoin which is why we need to become updated to whatever happens around us. When there is too much FUDs/negativity spread, people become panic and cause a sudden drop in price but if there is positive news, demand is high. It eventually told us that manipulation can easily win the minds of the people and so no way we can see a stable market price but the volatility keeps going.

[_BlackStar]

-snip-

People have been too reliant on the news and easily believe it without any verification if whether is true or false. This is a big factor that affects the volatility of Bitcoin which is why we need to become updated to whatever happens around us. When there is too much FUDs/negativity spread, people become panic and cause a sudden drop in price but if there is positive news, demand is high. It eventually told us that manipulation can easily win the minds of the people and so no way we can see a stable market price but the volatility keeps going.

Indeed - this is one of those things that may not be very profitable for a trader. Those who tend to panic over FUD news are just more likely to find losses than gains - but if they understand the trading strategy well then cut losses should always help.

Volatility is caused by supply and demand ^{[one of them],} but there are many other points that can cause volatility to exist. Speculation - the world's financial situation - politics - market sentiment and others can also influence prices, but traders must be wise enough in adjusting their trading strategy so they can minimize losses instead of panicking.