On-chain data shows that Ethereum realized volatility has now declined to rare levels observed only three times before in history.<\/p>\n
As per data from the on-chain analytics firm Glassnode<\/a>, the month of December 2022 was historically quiet for both Ethereum and Bitcoin. The \u201crealized volatility<\/a>\u201d is an indicator that measures the standard deviation of daily returns from the mean for the market in question.<\/p>\n The indicator is usually taken over a rolling window, with the one-week and one-month versions being generally the most useful timespans for it. In the context of the current discussion, the relevant metric is the one-month realized volatility.<\/p>\n When the value of the metric is high, it means the asset\u2019s price has been showing greater fluctuations from the average recently. Such a trend implies that the market is providing a high trading risk currently. On the other hand, low values suggest returns haven\u2019t deviated much from the mean, and hence that the price has been stuck in stale consolidation.<\/p>\n Now, here is a chart that shows the trend in the one-month Ethereum realized volatility over the last few years:<\/p>\n\n As displayed in the above graph, the Ethereum one-month realized volatility has plunged to just 39.8% recently, suggesting that the past month has had very little diversity in day-to-day returns. This current level of the indicator is actually a historically low value, and as is apparent from the chart, there have only been three instances in the history of the crypto where the price has been this stable.<\/p>\n Interestingly, after each occurrence of the volatility hitting these lows, the price has made a sharp move and the indicator has jumped back up. An important example of this was back in November 2018<\/a>, when the value of ETH collapsed toward the bottom of the bear market in a sudden move, after the metric had reached these rare levels.<\/p>\n Glassnode also points out that, just like for Ethereum, the one-month realized volatility for Bitcoin has also plunged to historical lows recently, as the below chart highlights.<\/p>\n\n As you can see above, the Bitcoin one-month realized volatility has only been lower than the current value (24.6%) a few times in the entire history of the crypto. A notable instance here was also in November 2018, where, just like ETH, BTC crashed down to form its bottom.<\/p>\n If these historical trends are anything to consider, then the current extremely low values in the one-month volatility for Ethereum and Bitcoin could mean both the cryptos may soon see a significant spike in the metric soon, but the accompanying price move could be toward either direction.<\/p>\n At the time of writing, Ethereum\u2019s price<\/a> floats around $1,300, up 8% in the last week.<\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n On-chain data shows that Ethereum realized volatility has now declined to rare levels observed only three times before in history.<\/p>\n As per data from the on-chain analytics firm Glassnode<\/a>, the month of December 2022 was historically quiet for both Ethereum and Bitcoin. The \u201crealized volatility<\/a>\u201d is an indicator that measures the standard deviation of daily returns from the mean for the market in question.<\/p>\n The indicator is usually taken over a rolling window, with the one-week and one-month versions being generally the most useful timespans for it. In the context of the current discussion, the relevant metric is the one-month realized volatility.<\/p>\n When the value of the metric is high, it means the asset\u2019s price has been showing greater fluctuations from the average recently. Such a trend implies that the market is providing a high trading risk currently. On the other hand, low values suggest returns haven\u2019t deviated much from the mean, and hence that the price has been stuck in stale consolidation.<\/p>\n Now, here is a chart that shows the trend in the one-month Ethereum realized volatility over the last few years:<\/p>\n As displayed in the above graph, the Ethereum one-month realized volatility has plunged to just 39.8% recently, suggesting that the past month has had very little diversity in day-to-day returns. This current level of the indicator is actually a historically low value, and as is apparent from the chart, there have only been three instances in the history of the crypto where the price has been this stable.<\/p>\n Interestingly, after each occurrence of the volatility hitting these lows, the price has made a sharp move and the indicator has jumped back up. An important example of this was back in November 2018<\/a>, when the value of ETH collapsed toward the bottom of the bear market in a sudden move, after the metric had reached these rare levels.<\/p>\n Glassnode also points out that, just like for Ethereum, the one-month realized volatility for Bitcoin has also plunged to historical lows recently, as the below chart highlights.<\/p>\n As you can see above, the Bitcoin one-month realized volatility has only been lower than the current value (24.6%) a few times in the entire history of the crypto. A notable instance here was also in November 2018, where, just like ETH, BTC crashed down to form its bottom.<\/p>\n If these historical trends are anything to consider, then the current extremely low values in the one-month volatility for Ethereum and Bitcoin could mean both the cryptos may soon see a significant spike in the metric soon, but the accompanying price move could be toward either direction.<\/p>\nETH Price<\/h2>\n
Ethereum 1-Month Realized Volatility Has Plummeted To Just 39.8%<\/h2>\n
ETH Price<\/h2>\n