Bitcoin's price volatility reached its highest since November 24th in January. (Photo by INA … [+]
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Bitcoin’s price volatility rose considerably last month, attaining its loftiest reading since late November as the cryptocurrency enjoyed robust gains.
The digital currency’s 30-day annualized volatility climbed to 61.33% on January 15th, according to analysis provided by asset manager Blockforce Capital.
At this point, the measure of bitcoin’s price fluctuations had risen 34% since the start of the month, hitting its highest since November 24th, additional figures from Blockforce Capital show.
The digital currency experienced this sharp increase in volatility as its price pushed higher in January, increasing more than 30% during the month, according to CoinDesk price data.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Numerous Bullish Factors
Bitcoin appreciated in January as the digital currency benefited from multiple tailwinds, according to market observers.
Recently, analysts have pointed to tensions in Iran, concerns about the Coronavirus and anticipation surrounding the upcoming halving as helping drive gains.
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, weighed in on this situation.
“January was very eventful for Bitcoin and the crypto space and saw a net gain in Bitcoin’s price despite volatility,” he stated.
“We can attribute this price action to various developments, starting from the US-Iran tensions in early January to the Coronavirus outbreak near the end,” noted DiPasquale.
“Add to these factors catalysts like the upcoming halving and the U.S. Fed leaving interest rates unchanged and it made sense for investors to turn towards BTC.”
Bitcoin’s Continued Adoption
Kiana Danial, CEO of Invest Diva, also noted other potential price drivers, emphasizing bitcoin’s continued adoption.
“We’re seeing Bitcoin ATMs in more locations around the US than ever, including in airports and in shopping malls, so the Bitcoin branding is gaining momentum,” she stated.
At the time of this writing, there were roughly 6,700 bitcoin ATMs around the world, according to data from coinatmradar.com. In comparison, fewer than 400 of these devices existed in early 2015.
Danial also noted that financial advisors are warming up to the digital currency, stating that they “are slowly but surely allocating small portions of Bitcoin and other crypto-assets to their client’s portfolios.”
This view is supported by recent survey data, as a January poll conducted by Bitwise Asset Management and ETF Trends found that the number of financial advisors who put their clients’ money into cryptocurrency is expected to reach 13% this year, more than double last year’s figure of 6%.
Technical Factors
While several analysts pointed toward fundamental developments as helping drive bitcoin’s price gains, some market observers also cited technical factors.
“Regardless of the current social and political climate that has contributed to the flight to safe assets, we also saw a very strong bullish indication beginning of January from a technical point of view,” said Danial.
“This was right after the launch of options on Bitcoin futures on the Chicago Mercantile Exchange (CME), which triggered the recent bullish momentum,” she stated.
“Bitcoin found support at $6,510 in December and broke above the daily Ichimoku cloud indicator mid-January, confirming the strong bullish signal.”
Going forward, bitcoin faces significant resistance at $9,500, said DiPasquale.
He noted that “$9,500 is a strong ceiling and we can expect the price action to lose momentum and possibly drop down towards $8,800, followed by $8,500, to affirm newly formed support levels, before it can realistically tackle the $10,000 barrier,” he stated.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.
