Bitcoin jumped on Friday above $30,000 for the first time since July, taking gains for the week past 10%. It was last up 4% on the day.
There was no immediate news catalyst for the move in Bitcoin. Still, its rise came against volatile cryptocurrency trading as investors reacted to industry developments. In particular, the US Securities and Exchange Commission on Tuesday confirmed it would treat some online crypto trading platforms as exchanges and could thus face increased regulation.
Historically, volatility has been one of Bitcoin’s most notable traits. It’s not uncommon for a single bitcoin to jump in price by 5% or even 10% in a single session. But as the cryptocurrency reaches maturity, its volatility has been falling as it moves closer to being considered a legitimate alternative currency.
The current volatility in Bitcoin is close to record lows, according to data from market analytics firm K33. This is despite a surge in volume, which has hit its highest level in over a year. It also comes despite the cryptocurrency’s implied volatility sitting below that of the S&P 500, tech stocks, and gold, a feat that has typically foreshadowed significant volatility eruptions shortly.
But low volatility doesn’t mean the end of Bitcoin’s wild ride to prominence. Instead, it may herald the beginning of an even more dramatic upswing. “Volatility is necessary for true price discovery, and it’s important to embrace,” said Bucella. “The Internet wasn’t built in a straight line, and it shouldn’t be expected that Bitcoin will linearly become the new world currency.”
The latest Bitcoin spike comes as the cryptocurrency tries to overcome a resistance level at $28,500, where it has struggled to sustain an uptrend over the past few weeks. The bitcoin price has already risen above that mark on two occasions this month, but the bulls have been unable to hold onto these gains.
If the price can break through this resistance level, it may set up a strong position for the rest of the month. Many analysts have predicted that October will be a month of upswings for the crypto market, thanks to the 2024 Bitcoin halving event and a renewed sense of investor confidence in Bitcoin’s long-term value. This could lead to a sustained rally that takes BTC above the $30,000 mark and beyond for an extended period. That could make cryptocurrency the dominant force in the crypto market for some time.