Crypto market volatility becomes more aggressive
- The crypto industry is quite volatile, and it has been for quite some time.
- The prices of many coins are skyrocketing, despite the fact that BTC is not leading the bull run.
- However, it might only be a matter of time before BTC returns to the lead.
Volatility of the cryptocurrency industry is nothing new. After all, the surging and crashing prices, while not the best for preserving wealth, are great for traders who use these opportunities to buy low and sell high in order to make profit.
However, it is still interesting to analyze volatility, see what causes it, how it affects the market, and how big or small it can get. By looking into this, it is easy to discover that volatility has been particularly aggressive over the past month, with its value going up and down as rapidly and as often as crypto prices themselves.
The crypto market volatility continues in May 2021
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According to the Crypto Volatility Index (CVI), the market has been rather volatile in April of this year, and so far, it appears that May will be just as volatile, if not more. CVI score has reached the low value of 74 two times in the past 30 days, only to replace this low score with a high score of 94. This is not the worst that the market has seen, of course.
In fact, it is relatively tame now compared to certain periods over the last two years. For example, back in January 2020, volatility has been at an even lower point of only 60. Three months later, however, it skyrocketed almost to 175.
But, even if we compare the current behavior of crypto prices to those, much more volatile periods, it is clear that the price is far from calm right now.
Crypto prices are moving up and down rapidly
As many likely know, Bitcoin’s market dominance has been unchallenged for a long time now, and as such, the world’s first cryptocurrency tends to lead the way for the rest of the industry. Typically, when BTC sees a price drop, the other cryptos tend to follow, and when it surges, the entire market is trading in the green. These days, however, bitcoin price is clearly struggling to breach certain resistances, as the coin seems to be stuck between two levels — a support at $48,000 and a resistance at $58,000.
However, while bitcoin doesn’t seem to be able to advance, that is not the case with Ethereum (ETH) which has been growing sharply since April 26th, until it reached a new all-time high at $3,523 only around 20 hours ago.
Ethereum has been performing excellently over the last month, as the DeFi sector continued to flourish, and while the NFT market started attracting celebrities, their fans, entire companies and even a few massive corporations. Its network, of course, still struggles due to scalability issues and high fees, but Ethereum has never been busier or more popular, which is clearly reflecting in its price.
As for BTC, there have been plenty of headlines recently questioning whether there are better opportunities, or noting how many coins are outperforming the world’s biggest asset. Not in price or market cap, of course, but when it comes to price performance, then yes, many have indeed outdone BTC.
Dogecoin (DOGE) is the prime example of this, as the coin surged roughly by 11,000% in 2021, currently holding the price of $0.66, and sitting as the 4th-largest cryptocurrency, partially due to Elon Musk’s influence, and partially due to the crypto industry’s determination to push doge up to $1.