Category Archives: Blue Line Futures

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Bitcoin Bottom Likely, Volatility at Lowest Levels in over a Year

The president of commodities brokerage and trading firm Blue Line Futures, Bill Baruch, said in a video for CNBC that Bitcoin volatility has plummeted and is at its lowest level in more than a year. He says this is a sign that selling has become exhausted, and now that the price and volatility are stable, the bottoming process can begin.

30-day Bitcoin volatility on the USD market exceeded 8% in early January 2018 and remained relatively high through February 2018 before starting a steep and steady decline in March 2018. Volatility dropped as low as 2.45% in June 2018, a 70% decline from peak volatility levels. This is the lowest level of volatility in over a year for Bitcoin, but there have been many times in the past that Bitcoin volatility has dropped even lower to below 1%, so perhaps the market is not at minimum volatility yet. Regardless, volatility around 3% indicates a much more stable market than before.

A bottom is a process, not a price according to Baruch, and a bottom will occur soon if Bitcoin’s price holds above USD 6,000, although the 100-week moving average indicates a bottom of USD 4,550. Baruch and Blue Line Futures expects Bitcoin’s price to go up significantly in the long term. He advises not to sell Bitcoin below the price of USD 10,000.

Baruch says the Bitcoin market rose too much, too fast, in December 2017 due to the launch of Bitcoin futures trading on CME and CBOE, which is a milestone in the maturation of a tradable asset. Speculation plus fear of missing out on profits are the primary reasons Bitcoin’s price soared far above its equilibrium according to Baruch. The sell-off from the peak of USD 20,000 down to less than USD 7,000 per Bitcoin has wiped out most of the over-enthusiasm, stabilizing the market.

Aside from expectations that low volatility levels might be a harbinger for a future Bitcoin price increase, in general, low volatility levels are beneficial for people who use Bitcoin as a currency.


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