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Kraken Intelligence, our team of in-house research experts, has released its Bitcoin Volatility Report for October 2020.
Each month, we take a deep dive into the fundamental and technical factors driving bitcoin’s price and volatility. Investors and traders should take note, as this edition has identified signs a new bull run may be about to begin.
- Grayscale reported record quarterly inflows of $1 billion, Square announced a $50 million bitcoin purchase and PayPal revealed it will allow users to buy and sell bitcoin, developments that provided no shortage of positive news for the market.
- Roughly 70,000 BTC left wallets holding over 100 BTC during the month, suggesting larger whales were engaged in profit-taking. However, demand from wallets with under 100 BTC offset these sales, as evidenced by bitcoin’s climb above $13,800.
- After setting an intra-month low of $10,384 on Oct. 2, bitcoin roared more than +28% to a 33-month high of $14,080 on Oct. 31 before finishing the month at $13,809.
- Annualized volatility was down 20 percentage points in October, with the metric falling to a 19-month low of 35.5%.
- Given bitcoin’s parabolic past, July’s multi-year pennant breakout and bitcoin’s latest move through $13,800 resistance, an ascent to $20,000 may follow.
What to Watch for Next:
- The Suppressed Pocket (The End) – Twelve times in the past, bitcoin’s annualized volatility bottomed between 15% and 30% before climbing 140% (on average) and returning +196% over 94 days. With 99 days passing since the trough was formed, and volatility on the cusp of falling back down into the “suppressed pocket,” an 8-year trend is on the verge of coming to an end.
- The Whales & The Goldfish – While whales (wallets with more than 100 BTC) took advantage…