October presented crypto investors with a surprise as Bitcoin – the world’s most famous cryptocurrency – seems to have stabilized. But according to analysts, this isn’t exactly a bad thing. The lack of volatility could indicate a “bottoming out” in Bitcoin’s prices. 

Cryptocurrencies have fallen significantly since a fiery run in 2021, in which Bitcoin prices reached an impressive $68,990. However, in the past couple of months, the digital currency has bounced around $20,000. Signaling that maybe the market’s volatility is settling. 

According to data from Kaiko – a crypto research firm – Bitcoin’s 20-day ongoing volatility dropped below that of stock market indexes for the first time since 2020. Both crypto and stocks are down in 2022 as the Fed continues to increase rates. The strengthening dollar has also weighed on the category. 

The correlation between stocks and Bitcoin has expanded over time as more traditional investors have started to invest in crypto. Bitcoin’s recent price stabilization signals an ease in volatility, which is a good sign according to some investors. 

The head of international crypto exchange Luno – Vijay Ayyar – mentioned that Bitcoin has been bound by a range between 18 and 25k for the past four months. That could indicate a potential bottoming out pattern and consolidation, especially given what the market is seeing in the Dollar index top. 

He stated that in previous cases, like what happened in 2015, the market witnessed Bitcoin bottom out when DXY has topped. He believes the same pattern is repeating now. The co-founder of crypto firm Nexo, Antoni Trenchev, says that the digital currency’s price stability is a sign that the crypto market is becoming less fragmented. 

This year was brutal for cryptocurrencies, which have suffered a significant comedown. Since the height of the 2021 rally, they have lost over $2 trillion in value. Bitcoin – the world’s largest crypto – dropped around 70% of its peak in November 2021. 

The “crypto winter” that is happening now is a result of the Federal Reserve’s aggressive tightening. The Fed has been increasing rates in an effort to curb inflation, and that had a direct impact in the crypto world. 

Big cryptocurrency companies like Three Arrows Capital were astounded by the pressure on crypto prices. That only helped to accelerate the market’s downward spiral. However, investors now believe that the ice is starting to melt. 

According to Ayyar, there are signs of a current accumulation stage. That’s when traditional investors are more favorable to invest in Bitcoin due to its price stabilization. He says that the fact that Bitcoin is stuck in the current price range makes investing in it a bit boring. However, it also means that it’s when retail starts to lose interest and money begins to flow.

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