A volatility report indicates that the spooky price upsurge witnessed in the cryptocurrency space, as spearheaded by Bitcoin few days back, harbingers market uncertainty and has the tendency to extensively heighten volatility.
The report by SFOX for March 2019 deeply explored the volatility indices of some notable cryptocurrencies, citing the unexplained price jump of April 1st-2nd as a reason for a possible future market volatility.
The research likened the 2017 rally and the volatility that followed with this recent inexplicable upsurge.
“If the late-2017 rally is any indication, the sharp movement in BTC’s price without a clear cause could potentially lead to greater market uncertainty, which, in theory, could drive volatility upwards.”
Cryptocurrency Industry Growing Beyond Bitcoin (BTC)
The research also summarized that the cryptocurrency industry is extensively growing beyond Bitcoin (BTC). According to the report, the volatility movement shown by different altcoins like Ethereum, Bitcoin Cash and Litecoin affirms that the cryptocurrency industry is growing beyond Bitcoin (BTC).
In the past, altcoins follows Bitcoin’s volatility trends and so, when Bitcoin showed certain volatility percentage, they, other cryptos, followed.
Regarding the price growth noticed in Bitcoin Cash (BCH), which rallied over 18% in a span of 48 hours, the report says the rally could be likened to the normal “spooky rallies” without a reason safe for the fact that the trading volume of BCH increased significantly on LBank, a crypto exchange once accused of faking trade volume.
The report says Litecoin (LTC)’s price growth could be linked with its exploration of privacy-focused transaction, LTC halving among other things. While Litecoin’s volatility reduced, the price of LTC is between $55 – $61. In all, volatility has gradually decreased in the crypto space with some of the top altcoins showing smaller signs of volatility.
“By looking at the 30-day historical volatilities of BTC, ETH, BCH, LTC, BSV, and ETC, we see that the crypto sector’s volatility gradually declined throughout the month, with the exception of LTC’s volatility increasing in early March and BCH’s volatility increasing in mid-March.”