Volatility of bitcoin

[notocactus]

When panic sell is added to that equation, it will not only bring in the $8 million but will thin out the order book to make it easier to dump.
It also cuts both ways, you can see that same $8 mil would push the price up by about 10% as well.

Bitcoin market has smaller trading volume than stock market so it's easider to be dumped. Your example is about possible % of price fall with same market liquidity but in a market, market makers will remove their current waiting buy orders or adjusted to lower prices so that the "support" will be no longer exist, and price will crash more quickly and terribly.

There is also possible appearance of Cascade effect to liquidate leveraged people in this market during most volatile moments when price will quickly dump more than 10% with same $8M.

[aoluain]

But how exactly  is bitcoin  volatile.

Because of us Humans and all our different personalities and wishes.

Bitcoin itself isnt volatile, the developers and miners do their work at a constant
rate. Its the Bitcoin MARKET which is volatile, it reacts to human sentiment and
our speculative habits.

Nobody knows the future but we all try to speculate on what way its going to go.
The market is down ATM so there is a good chance there is an air of the start of
a bear market.

The market is open 25/7/365 to anyone and everyone, there is no control
over how and when we can access it so of course there is going to be a lot of movement.

[chigo]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

You're just dreaming if you want a stable Bitcoin price. If you want a coin with a stable price, choose a stable token/coin like USD and similar.

What distinguishes Bitcoin from altcoins is its price, which is impossible to stabilize, and its circulation, which cannot be increased or decreased (the number is fixed).

Bitcoin will always experience rapid and unpredictable price fluctuations, especially since there are only 21 million Bitcoins in circulation. This makes those with significant funds continue to view Bitcoin as an investment instrument.

[purple_sparkles]

For me,bitcoin’s volatility is one of its main attractions and a key reason why it’s worth buying. As the price chart shows, bitcoin continues to grow over time, and the periods of significant decline can be used for accumulation. I don’t even worry if I buy at a higher price and it later drops sharply, because eventually it recovers and climbs even higher. Since bitcoin is essentially a long-term investment for me and not a one-month project, this approach suits me perfectly.

[mrust_mobile]

Bitcoin is not volatile at all. Last time I checked 1 btc equaled 1 btc and I don’t think that rate has ever changed before. Btc/usd is very volatile though. It is because we are trading an asset that loses its purchasing power (usd) for an asset that gains purchasing power (btc), that trade logic itself creates volatility. Traders create volatility too, especially the whales but i am trying to explain that btc/usd pair is structurally volatile right out of the box.

To some people that’s a good thing as they think they can ride the waves and make money by buying low and selling high. To some other people that’s a bad thing. They think volatility harms bitcoin and drives away serious long term investors.

[free-bit.co.in]

Bitcoin is not volatile at all. Last time I checked 1 btc equaled 1 btc and I don’t think that rate has ever changed before. Btc/usd is very volatile though. It is because we are trading an asset that loses its purchasing power (usd) for an asset that gains purchasing power (btc), that trade logic itself creates volatility. Traders create volatility too, especially the whales but i am trying to explain that btc/usd pair is structurally volatile right out of the box.

Bitcoin is not an official currency nor is it used as the primary unit of measurement in our economy. So even if you say 1BTC = 1BTC or it doesn't fluctuate at all, but in the end when you use it, you still have to rely on the BTC/USD pair rate. So there is no need to complicate matters. Bitcoin is volatile.

To some people that’s a good thing as they think they can ride the waves and make money by buying low and selling high. To some other people that’s a bad thing. They think volatility harms bitcoin and drives away serious long term investors.

Volatility is good or bad depending on your perspective. But I believe that if bitcoin were not volatile, I don't think it would attract as many investors as it does today.

[Satofan44]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

You're just dreaming if you want a stable Bitcoin price. If you want a coin with a stable price, choose a stable token/coin like USD and similar.

Read other posts before writing your generic shitpost idiot. Stablecoins do not have a stable "price" it is an illusion that hides the volatility behind the peg. Every stablecoin is very volatile.

Bitcoin will always experience rapid and unpredictable price fluctuations, especially since there are only 21 million Bitcoins in circulation.

Nonsense, one has nothing to do with each other and the usage of the word always makes your statement an exaggerated lie. Both the price fluctuations and overall volatility have been diminishing, so the evidence points to the contrary. Bitcoin is going to reach a point where volatility is extremely low. It is going to take a while though, the world is full of retards such as yourself. 

Bitcoin is not an official currency nor is it used as the primary unit of measurement in our economy. So even if you say 1BTC = 1BTC or it doesn't fluctuate at all, but in the end when you use it, you still have to rely on the BTC/USD pair rate. So there is no need to complicate matters. Bitcoin is volatile.

The same is true for the currency of your country starting with the second sentence. It is extremely volatile. What about it? Repeating this stuff is like yapping that water is wet every day. It sounds smart but it ain't.

[BlackHatCoiner]

There are two main reasons that make bitcoin volatile. (1) not-so-packed order books

"Not-so-packed order books" in combination with insane leverage trading. I think that's what primarily keeps it so volatile. People think it's just demand and supply, but that's only true over the long term. Over the short term, it's a casino where the players are traders, and the house is brokers. Nobody can convince me that a 10% down in one day is because some people suddenly stopped believing in bitcoin, simultaneously. There are just so many long and short positions, and a house that always wins.

There is just no other good reason for short-term volatility. Anything else is just natural, i.e. selling BTC for Christmas.

[qurbanshah02]

For me,bitcoin’s volatility is one of its main attractions and a key reason why it’s worth buying. As the price chart shows, bitcoin continues to grow over time, and the periods of significant decline can be used for accumulation. I don’t even worry if I buy at a higher price and it later drops sharply, because eventually it recovers and climbs even higher. Since bitcoin is essentially a long-term investment for me and not a one-month project, this approach suits me perfectly.

The price of everything in the world goes up and down and Bitcoin is quite famous for this because when we want to buy it at a good price, we want it to come down and when we want to sell it, it should go up. During this time, Bitcoin does a lot of bad things and also does a lot of good things, which is why if this thing does not happen in Bitcoin every day and every minute, we will control Bitcoin in our own opinion, which would be very wrong. Here we give ourselves patience because from where we have bought Bitcoin and if it goes even lower than this, we will see an even higher price again, but they take out some buyers who take profits from Bitcoin very quickly.

[d5000]

The fact is, volatile was never a hindrance. It instead incentivizes adoption of crypto. The deflationary nature of crypto is what make it very interesting asset to buy and its volatile is what attract traders around the world.

Volatility is a feature and not a hindrance.

Historically this is true. But think a little bit deeper about that.

Of course volatility is what makes some "crypto" attractive. But this is mostly true for shitcoins, and it's their only reason to exist.

Now: the general altcoin market has been declining in the last years (since 2017 approximately, when altcoin market reached "maturity" first time) if we observe Bitcoin dominance. Most altcoins experience a single pump and then never reach their ATH again. Even ETH has failed (by few USD!) to hit a new ATH in 2025.

This has a reason: The altcoin market benefitted a lot at first from the narrative "you can get rich if you invest in the next Bitcoin!". Well, turned out there was no next Bitcoin. Thus this narrative is weakening year by year, and that's also why altcoin seasons are also much weaker than they were. In each season, there are disappointed bagholders left, and they will probably never touch altcoins again if their losses were too big.

What has this to do with Bitcoin? Well, Bitcoin could share the same fate if it stays as volatile as now. There are few "bigger fools" left, as those that can and would like afford to invest have often already invested. Perhaps we can duplicate or triple the user base based on pure speculative investment. I'd say that the potential eternal ATH of a speculative BTC is higher than now but not more than 200-400k.

For further growth beyond "speculative use" we need a perspective for a more reliable store of value or "currency unit". And that means lower volatility.

[macson]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

This is due to short-term market sentiment. If there's positive news, the Bitcoin price will rise rapidly in the short term as people start buying in the hope that the price will continue to rise. However, when there's negative news, people start selling their assets quickly to avoid losses, causing the Bitcoin price to drop sharply in a short period of time.

But this volatility will gradually decrease as the market matures. With the number of market participants increases, regulations become clearer, and Bitcoin's use becomes more widespread, this will increase the total Bitcoin market cap, making it less likely that large transactions or short-term sentiment will affect the price, thus stabilizing the price.

[Hispo]

...I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Basically, pegged coins like those people calle stablecoins are backed by assets, it can be in a decentralized or centralized way, the existence of those assets and the liquidity provided by them does not allow the price to go away from the intended value of those stable coins. In the case of Bitcoin, there is nothing backing or pegging the value of it to a certain number, so the value of bitcoin is floating and depends on other factors, mostly supply and demand (though there is also the possibility of market manipulation by whales and exchanges).

That is rather a basic question, you should read around the internet about stablecoins and speculative assets before diving into this forum, in my opinion, it is good you want to learn about bitcoin and cryptocurrency in general, but this is something which has been answered countless times here before.

People in this forum sometimes do not like newbies asking the same over and over again.

[I_Anime]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Just like many have said already is matter of supply and demand. More the sell volume increase more prices drop and more the volume of buying increases more the price rises .

And volatility is the constant changing of the market prices , we shows that demand and supply move the market in form of liquidity and stuff .

[Hyphen(-)]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

It is something very easy to understand I think. Bitcoin have limited supply, and demand of Bitcoin is increasing everyday due to rate of adoption and so on, so the price will be based on demand and the amount available for sale that is why the price will never be stable. Sometimes, when there is a panic sell in the market, the supply will be high and the demand will seems to be low due to panic by some investors that are either done with their investment or have another plan ahead; and that is the moment Bitcoin price used to be down a bit, and when the demand rise, the price goes up as well.

[ColdLava40]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

You speak of volatility and stability at same time, don't you think bitcoin only features one of them which is volatile in nature? The concept of volatility is mostly responsible for bitcoins price movement. Compare it with how most altcoins are, you will see that Bitcoin is less volatile.

Altcoins can go from 100 to 0 because there aren't enough buyers waiting at every price level to catch the fall. But bitcoin has the highest liquidity and market cap, it requires billions of dollars to move the price significantly. This creates a sturdier floor. To a trader who just saw their altcoin drop 90%, Bitcoin’s 5% dip feels like stability.

Now price can't be stable for reason be that liquidity goes in and out every sec of the day. The moment the market becomes stable, it may simple mean that we no longer have traders buying and selling bitcoin. But the chances of this happening is very low.

[Orpichukwu]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

The price is not stable or like other pegged coins because it's not a pegged coin; it doesn't derive its value from others. It's a standalone coin whose value is being determined by demand and not like pegged USDT or any other stable coin that's linked to real-life USD. Its value is being controlled by demand; there is no fixed price for it.

[adultcrypto]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Price of bitcoin is not stable due to the issue of demand and supply. Bitcoin was designed to be volatile just like gold and other assets that are traded in the market. Who causes the volatility is speculation by the market participants which is like a response to news or events happening around bitcoin or around the globe. For instance, if there is a sudden policy change by the US government, you will see how volatile the market will get because investors are speculating on the impact of such change in policy and will be adjusting their assets to benefit from such move. Another example is in case of shocking news kike war or disease outbreak, these are things that shapes the behavior of bitcoin in the market.

[famososMuertos]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

First of all, I want to say that this question will never cease to exist, so I believe kindness and courtesy should always be present in the response. However, the problem lies in the context you provide; the basis on which you ask your question is flawed.

And I say this because no matter how much of an expert someone is on the subject, or how many years they have in the field, they will eventually encounter "bitcoin volatility."

We live with it daily; volatility is inherent in financial assets; it is the "soul" of any type of financial asset that faces supply and demand.

Now, bitcoin has the peculiarity that, unlike any other financial asset that faces supply and demand, it loses value almost instantly as it loses percentage value. And that loss is often related to confidence. No other asset since bitcoin's inception has ever lost more than 80% of its value and then recovered so dramatically, even tripling its value after such a dramatic drop.

And that, in essence, is what drives traditional economists "crazy," or those who don't understand that this voracious volatility is an essential part of bitcoin, at least at this stage. This is because more appropriate percentage parameters, or what's called the horizontal base (or 'bed') of an asset, are certainly not yet perceptible in bitcoin.

But this will come, and perhaps neither you nor anyone else logged into this forum today will live to see it (imo ), but it will surely come.

But when that happens, a 1% change will be categorized as highly volatile in the future, just as we currently see with double-digit percentage losses, or the most recent drop of more than +30%.

In conclusion, bitcoin volatility is normal.

[BlackBoss_]

But when that happens, a 1% change will be categorized as highly volatile in the future, just as we currently see with double-digit percentage losses, or the most recent drop of more than +30%.

In conclusion, bitcoin volatility is normal.

Bitcoin will have less ROI for future four year cycle and its price volatility will become smaller when Bitcoin market grows bigger in market cap and has participation of more institutional investors. It's very natural growth for Bitcoin market and I am optimistic about the future of Bitcoin and our investment chance. I believe that we still have time for enjoying good ROI from Bitcoin in next several market cycles before its cycle ROI shrinks considerably.

I think next two to three market cycles, we will still have good ROIs from Bitcoin, and after that the ROI for far future cycles will become much smaller but don't worry, it will still be profitable if you can hold your bitcoins a long time.

[CryptoYar]

Price of Bitcoin is unstable since, as opposed to steady coins, which are tied to real US dollar, BTC is not tied to anything and its value simply moves according to desire of people to pay in new market. Its main reason for instability is that its supply is fixed and rare, having just 21 million coins, so any small change in number of people who want to buy or sell it results in huge and sudden price rise. News and market excitement and big trades by large investors can also easily change price, as market is still smaller than others. And new government rules can lead to instant, hard to guess changes. Simply put, Bitcoin is unstable, as it is rare thing in new market with strong feelings, where rules are not backed by government promises but by code.