As the Bitcoin price consolidates around $33,000 (for reasons given below) on Thursday (Jan 21), it is worth noting that CryptoCompare’s Bitcoin Volatility Index (BVIN) has fallen around 5.25% in the past 24-hour period.
On 3 December 2020, CryptoCompare, a leading cryptoasset market data provider, launched the Bitcoin Volatility Index (BVIN), which was developed in partnership with the University of Sussex Business School. This innovative tool for Bitcoin traders provides a highly accurate way to understand Bitcoin’s 30-day implied volatility, i.e. how volatile Bitcoin prices are likely to be over the next 30 days based on traders’ expectations. In the past 24-hour period, BVIN has fallen 5.25%.
According to data by CryptoCompare, around 16:00 UTC on Tuesday (January 19), just before the start of U.S. Senate Finance Committee hearing to consider the anticipated nomination of former Fed Chair Janet L. Yellen to Secretary of the Treasury), Bitcoin was trading around $37,390.
Currently (as of 10:07 UTC on January 21), Bitcoin is trading around $32,760, down 5.67% in the past 24-hour period.
So, why has the Bitcoin price dropped 12.38% since that U.S. Senate hearing?
Well, this seems to be mostly due to selling by BTC whales, as explained in the thread below by Ki Young Ju, the CEO of South Korean blockchain analytics startup CryptoQuant:
As for why BTC whales and some retail investors might be selling, it is probably partly to lock in some profits and partly over concerns about Yellen’s comments at Tuesday hearing, where she made some negative comments about cryptocurrencies in response to a question by Senator Maggie Hassan (D-N.H.).
Popular crypto analyst and trader Michaël van de Poppe said earlier today that the kind of Bitcoin price correction we are witnessing is healthy:
And prominent crypto analyst Alex Krüger said yesterday that it is silly for traders and investors to worry about short-term BTC price action when it is clear that major institutional investors are getting into Bitcoin, which should mean that the long-term outlook for Bitcoin remains bright.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.